Preamble

The House met at half-past Two o'clock

PRAYERS

[Mr. SPEAKER in the Chair]

Oral Answers to Questions — TECHNICAL CO-OPERATION

Africa (Technology Students)

Mr. Bence: asked the Secretary for Technical Co-operation how many students in colleges of technology in African Commonwealth countries are being financed by his Department.

The Secretary for Technical Cooperation (Mr. Robert Carr): None, Sir. We give aid to technological training overseas not by grants direct to students but by providing assistance to certain institutions and to the staff serving in them.

Mr. Bence: Would it not be desirable if Her Majesty's Government could offer scholarships to students in these territories, to encourage greater interest and drive among these people to seek higher education?

Mr. Carr: While, of course, we do, and it is right that we should, offer many scholarships to people to come and train here, it would be rather difficult and tricky in some ways to offer scholarships to students of another country in their own institutions. I think it is better for us and more in accord with the wishes and needs of the developing countries if we help those countries to build up their own institutions and leave them to give such grants as may be necessary to their students.

University Graduates (Work in Africa)

Mr. Bence: asked the Secretary for Technical Co-operation how many British graduates of British universities are teaching and doing research in African Commonwealth countries.

Mr. R. Carr: There are approximately 1,600 British graduates engaged on teaching and research in African Commonwealth countries who are financially assisted by my Department. There are also about 600 employed in universities. The number of those engaged in similar work in the private sector is not known to me.

Mr. Bence: While thanking the right hon. Gentleman for that reply and while expressing satisfaction that the figures are such as they are, may I ask him whether he would not agree that it is very important that in helping the under-developed countries we should do all we can, whether by grants or scholarships, or by sending experts from our country to stimulate in the countries themselves an urge to reach the highest scientific and technological levels, since by establishing such institutions in these countries we can probably do more good for them than by giving material aid?

Mr. Carr: I fully agree with all that the hon. Gentleman says. I think that those British people who are prepared to go out and teach in this way are doing a fine job. It is an aspect of the brain drain which I am doing all I can to encourage.

Mr. G. M. Thomson: Could the right hon. Gentleman tell us of any progress that has been made in the scheme for co-operation between British and overseas universities, for the secondment of university staffs to developing countries?

Mr. Carr: I am not sure whether the hon. Gentleman has any specific points in mind. If so, perhaps he could put specific Questions to me on the Notice Paper. In general, I think that the scheme is going well.

Northern Rhodesia(Doctors and Nurses)

Mr. Boyden: asked the Secretary for Technical Co-operation how many British doctors and nurses he expects to recruit this year for service in Northern Rhodesia.

Mr. R. Carr: We have been asked to supply 20 medical officers. So far we have three British doctors in line for appointment, but this is a very difficult field and we are not confining our


recruiting efforts to this country. I cannot yet say how many we are likely to recruit this year. Fifty staff nurses have been asked for and there are good prospects of supplying them.

Mr. Boyden: Is not the situation very disappointing? Even if the 20 were appointed, how far would this go to replace wastage in the existing service?

Mr. Carr: The doctor recruitment situation is very difficult and serious. We have, for example, on our books 230 vacancies for doctors and medical specialists for 38 countries, and only half the number of British doctors who are needed are coming forward. This matter is receiving special attention from a special panel of the Porritt Committee and I am expecting a report from that panel very shortly.

Mr. G. M. Thomson: Apart from the difficulties in the supply of doctors, which are understood, is the right hon. Gentleman satisfied with the time taken to meet these applications from overseas countries? Is the right hon. Gentleman aware that some of them are complaining that his Department takes a great deal longer to deal with these applications than, say, the equivalent department in the Federal Republic of Germany?

Mr. Carr: I am, of course, aware that these countries need these doctors and other specialists very quickly, and when we find difficulty in recruiting and we are slow in finding people there is disappointment. I have been looking into these difficulties and I am satisfied that any slowness is due to the shortage of supply and not to any procedural red tape. Procedural red tape is something that we are constantly getting our knife to.

Agricultural Liaison Officers

Mr. Swingler: asked the Secretary for Technical Co-operation when he expects to appoint agricultural liaison officers to the High Commission offices in the developing countries of the Commonwealth.

Mr. R. Carr: I am not convinced that such specialised permanent representation is needed at present, particularly in view of the regular contacts maintained by my professional advisers with

these countries; but I will review the position with my right hon. Friend in the light of experience.

Mr. Swingler: Has the right hon. Gentleman considered the report which led to this recommendation? Is not he aware that there is a need for a better assessment on the spot of the requirements of the developing countries, not only in terms of equipment and capital but in agriculture, education, and matters of that kind? If only a comparatively small number of personnel is involved, would it not be possible to take some tentative steps to try to get the better liaison which is recommended?

Mr. Carr: I agree with the purpose behind the hon. Member's remarks, but I do not think that the sort of attachment which he suggests in his Question is the best way of meeting the point, at any rate at present. We are trying to build up, and are increasing the establishment of one or two home-based institutions, in order to provide more advisers in the many different specialities connected with agriculture in order to provide a better service overseas.

Mr. F. Noel-Baker: Would not one effective way to deal with this problem be to set up in other parts of the world bodies modelled on the Development Division in the Middle East, operated by the right hon. Gentleman's Department?

Mr. Carr: That Division is certainly doing very fine work. I made a particular point of calling to see how it was working on my way back from Asia before Christmas, and the point that the hon. Gentleman has raised is very much in my mind.

University Admissions

Mr. G. M. Thomson: asked the Secretary for Technical Co-operation if he will make representations to the University Central Council on Admissions to ensure that students from developing countries applying for places at British universities have the same admission procedure applied to them as is applied to students from the United Kingdom.

Mr. R. Carr: I have already been in consultation with the Council on this matter. It is sympathetic to this point, and has assured me that it is seeking to simplify the system in the hope of achieving a common procedure for all applicants in 1965–66.

Mr. Thomson: I appreciate the efforts made by the Minister in this matter, but is not he aware that during the coming year, for the first time, there will be discrimination against Commonwealth students from developing countries. Is he aware that the students' officers of the Commonwealth High Commissions here are deeply offended by this development? Can something further be done to make the university clearing house aware of the unfortunate effect which this action has on Commonwealth students?

Mr. Carr: What the Central Council is trying to do is something that I am sure we would all agree with, namely, to create a system of admissions for all students, home or overseas, on the same basis. Hitherto, overseas students have not been admitted on the same basis. This year has been what the Council has described to me as a running-in year. I am afraid that it is too late to do anything this year. The full system would not work this year. I am satisfied that this is a step towards a genuinely uniform system.

Sir Knox Cunningham: Is it not a fact that certain places are reserved for overseas students in universities, and that in such cases they have priority over our students?

Mr. Carr: I cannot speak from direct knowledge of that point. I would not have thought so, however, except in respect of the relatively small number of scholarships and endowments which various universities have specifically for overseas students. They would cover only a small number of overseas students. Generally the universities are completely autonomous in their selection of students, whether from home or overseas.

Films

Mr. Oram: asked the Secretary for Technical Co-operation if he will make a statement about the extent to which his Department is now equipped to make

and distribute films for use in developing countries; and what his future policy is in this respect.

Mr. R. Carr: My Department supplies films for use in education and training but does not itself make and distribute them. It also provides experts and training facilities in film making when requested to do so by developing countries.

Mr. Oram: Does not the right hon. Gentleman consider that as the work of his Department increases there will be an increasing need for films not just borrowed from other Departments or institutions but specifically directed to the work of his own Department? Ought not he to be thinking of setting up the right sort of film unit within his own Department for these purposes?

Mr. Carr: I have no doubt that that is a matter that we should keep our eye on, but I am satisfied that up to now it would be wrong for us to take on the big expenditure, heavy commitments and the staff involved in going into the film producing and distributing business. At the moment—and as far as I can see, in the foreseeable future—we are doing the right thing. But I will certainly keep my eye on the situation.

Technical Experts

Mr. Oram: asked the Secretary for Technical Co-operation if he is aware that, in order to encourage technical experts to undertake periods of overseas service, it is necessary to guarantee security in respect of their future employment and promotion at home; and what proposals he has to help employers offer such guarantees to members of their staff.

Mr. R. Carr: Promotion can seldom be guaranteed, but there are satisfactory arrangements for the re-employment on return from overseas of teachers, civil servants and the staff of public corporations. Arrangements in the local government field are being examined. We do all we can to encourage private employers and the professions to recognise this need, and to give positive credit for overseas service.

Mr. Oram: Does not the right hon. Gentleman recognise that the Question is directed more to non-public employers than to the organisations he mentioned


in the first part of his Answer? Does not this problem apply particularly to the small firm and the small organisation? They might have very suitable staffs, but would it not be unreasonable to ask the staffs to take the risk involved, or the firm to shoulder the financial burden that may be involved in reorganising its set-up? Is not there a need for a tripartite arrangement, providing for Government assistance and an employee-employer relationship, in order to make sure that people go out for the right sort of period?

Mr. Carr: It would be very difficult to organise any formal scheme. So far we have managed, on the whole, to meet the requests which have come to us. We have to do most of this by persuasion at the moment, as far as I can see, and the officers of my Department and I are having many conversations with the leaders of the professions and the employers. We shall try to find ways to make more overseas recruitment possible.

Sir C. Osborne: In his reply my right hon. Friend said that promotion can seldom be guaranteed. Under what circumstances can it ever be guaranteed, in a free society?

Mr. Carr: I should like to know that, for my own use.

Mr. F. Noel-Baker: Is not there a real difficulty concerning the people doing this kind of service, arising from the effect on their health insurance and pensions? Will the right hon. Gentleman have special talks with his right hon. Friend in order to consider that aspect of the matter, which affects both public and private employees?

Mr. Carr: I will certainly take that into account.

Council for Volunteers Overseas

Mr. Goodhew: asked the Secretary for Technical Co-operation what progress has been made in setting up the Council for Volunteers Overseas.

Mr. R. Carr: The membership of the Council under the Presidency of His Royal Highness The Duke of Edinburgh has now been settled. I will, with permission, publish in the OFFICIAL REPORT the Council's terms of reference and the names of those who have accepted invitations to become members. I

understand that the Council will hold its first meeting towards the end of May.

Mr. Goodhew: Is my right hon. Friend aware that this news will be warmly welcomed by all those who support the admirable work of this service? Is he aware that this House will wish to support the work of the Council throughout its term and that we hope that the Government will do likewise?

Mr. Carr: I am glad to hear my hon. Friend say that. This is something which has the support of all parties and that is much appreciated.

The following is the information:
Council's terms of reference:

(i) To receive reports from the Voluntary Societies' Committee for Service Overseas (the Lockwood Committee) and the voluntary bodies about the progress of their current programmes of sending volunteers overseas and of their plans for the future.
(ii) To discuss these reports and future plans and to advise the voluntary bodies and, the Department of Technical Cooperation, through the Lockwood Committee, on any question of policy affecting the programmes;
(iii) To advise on ways of increasing interest in the work of the voluntary societies.

THE COUNCIL FOR VOLUNTEERS OVERSEAS

President: H.R.H. The Duke of Edinburgh.

Invited Members:

Countess of Albemarle, D.B.E.
Professor Ritchie Calder, C.B.E.
Sir Jock Campbell.
Miss Mary Carpenter.
Mr. Blair Cunynghame, O.B.E.
Earl de la Warr, G.B.E.
Sir Hugh Foot, K.C.V.O., G.C.M.G., O.B.E.
Sir Berkeley Gage, K.C.M.G
Dr. Michael Grant, C.B.E.
Sir George Haynes, C.B.E.
Sir John Hunt, C.B.E., D.S.O.
Mr. Maurice Laing.
Sir John Lockwood.
Miss Beryl Paston-Brown.
Miss Rachel Pearse, O.B.E.
Dame Barbara Salt, D.B.E.
Sir Herbert Seddon, C.M.G.
Mr. Dunstan Skilbeck, C.B.E.
Mr. Wynford Vaughan-Thomas.
Sir Peter Venables.
Mr. Roger Young.

Representatives of Voluntary Bodies:

Viscount Amory, G.C.M.G., T.D.—Voluntary Service Overseas.
Mr. Ronald Bell—Scottish Union of Students.
Mr. Douglas Childs—International Voluntary Service.
Mr. Aneurin Rhys Hughes—National Union of Students.
Mr. Nigel Nicolson, M.B.E.—United Nations Association.

Ex Volunteers:

One Graduate Ex Volunteer from each of the above five organisations.
One Cadet Ex Volunteer from Voluntary Service Overseas.

Observers:
The Right hon. Robert Carr, M.P.—Secretary for Technical Co-operation,

or

Sir Andrew Cohen, K.C.V.O., K.C.M.G., O.B.E.—Director-General, Department of Technical Co-operation,

Sir Paul Sinker, K.C.M.G.—Director-General British Council,

Mr. J. G. Lindstrom—United Nations Representative in London.

Secretary:
Mr. Philip Zealey.

Designated and Non-Designated Officers, Nyasaland

Mr. Wall: asked the Secretary for Technical Co-operation (1) what payment, other than earned pension, is being offered to designated and to non-designated officers, respectively, in Nyasaland who are no longer required after independence; and approximately how many officers there are in each category;
(2) what compensation is being offered to non-designated British civil servants in Nyasaland whose posts are redundant on independence or whose services are not required after independence by the Nyasaland Government.

Mr. R. Carr: There are approximately 600 designated officers still serving in Nyasaland and 16 non-designated officers on overseas terms of service. A general compensation scheme for designated officers is already in force and I am informed by my right hon. Friend the Secretary of State for Commonwealth Relations that the Nyasaland Government is about to introduce a retirement benefits scheme for the non-designated officers. I will, with permission, circulate brief details of these schemes in the OFFICIAL REPORT.

Mr. Wall: My right hon. Friend has said that there are only 16 non-designated officers. Would he look at the difference between the terms offered to designated and non-designated officers and try to be more generous to the non-designated officers? Is he aware that, so far as I know, there is no machinery for arbitration or for the consideration of cases of hardship, and will he see whether this can be introduced?

Mr. Carr: The terms for non-designated officers is not my responsibility, but that of my right hon. Friend. I will consult him and draw his attention to what has been said by my hon. Friend.

Mr. G. M. Thomson: In view of the relatively small number of non-designated officers, is the Minister aware that there would be strong support from hon. Members on this side of the House for any generous arrangements made about hardship cases?

Mr. Carr: I note that.

The following is the information:
So far as designated officers in Nyasaland are concerned, a general compensation scheme is already n force based on the principles set out in Cmnd. 1193. Under that scheme an entitled officer can elect to retire on giving six months' notice, in which case he receives compensation by instalments; if he is required to retire, he receives his compensation in a lump sum. The amount of compensation depends upon the officer's salary, age and length of service.
For non-designated officers, of whom there are 16 serving on overseas terms of service in Nyasaland, the Nyasaland Government is about to introduce a retirement benefits scheme, under which an officer will be able to elect to retire on pension earned to date irrespective of length of service or may be required to retire. For those required to retire, the element of compensation under this scheme is based on that provided under the pensions legislation when an officer retires on abolition of office, and provision exists for the commutation of the compensatory addition to pension in accordance with a special table of factors; the amount of compensation will depend upon the officer's salary and length of service.

Charitable Organisations (Development Work Overseas)

Mr. F. Noel-Baker: asked the Secretary for Technical Co-operation what consultations there have been between his Department and voluntary organisations regarding the allocation of money collected by registered charities for development work overseas.

Mr. R. Carr: There are consultations from time to time about specific projects or questions; but there has been no approach to my Department about overall allocation.

Mr. Noel-Baker: The Minister will be aware that there is grave anxiety felt by some of the leading voluntary bodies in this country and that a statement was made yesterday in another place. Am I


right in thinking that the meaning of that statement is that there is in fact no serious obstacle to the allocation of charitably subscribed money to development projects overseas, provided that the constituent body collecting the money makes plain that contributions might be used in such a way?

Mr. Carr: This is very largely a matter for the jurisdiction of the court, and the interpretation of trust deeds and terms of reference, and so I feel that it would be wrong for me to express a definite opinion. I think that the House will have noticed that some noble Lords in another place were reasonably encouraged by what my noble Friend said on this matter yesterday.

Developing Countries (Aid and Assistance)

Mr. F. Noel-Baker: asked the Secretary for Technical Co-operation what steps he is taking in connection with the setting up of a new council to stimulate and co-ordinate British aid and assistance to developing countries; and what is the time-table for the establishment of this council.

Mr. R. Carr: None, Sir, so far as Government aid is concerned. If the hon. Member is referring to discussions which I understand are going on between voluntary societies, I have received no proposals, and therefore the second part of the Question does not arise.

Mr. Noel-Baker: Is not it a fact that there are proposals for the creation of a new council to stimulate and coordinate the activities of both voluntary and official bodies in respect of aid to developing countries? Is not it important that the Government's view should be known and expressed at an early date?

Mr. Carr: The Government facilitates the work of voluntary agencies in many ways and I need hardly emphasise that we attach tremendous value to what they are doing. I think that it is for the voluntary societies to complete the discussions between themselves, and it would not be proper for me to comment on that.

Mrs. Castle: Would not the best way of co-ordinating and stimulating British aid and assistance to developing countries be by merging the right hon. Gentleman's own Department into a really effective Ministry of Overseas Aid?

Mr. Carr: Perhaps I am unduly vain, but I like to think that my Department is already an efficient instrument of aid. I believe that it has achieved a great deal during the 2½ years since it was set up. We should delude ourselves if we imagine that the setting up of a new Ministry, or changing an organisation, of itself achieved very much. When the need was there, my Department was set up in its present form. I am satisfied that when there is a need for a change in the organisation, it will be made.

Mr. Bottomley: I am sure that the Minister would agree that it is wasteful to have several voluntary organisations all doing the same thing? Would not it be wise for the Minister to consider suggesting that they come together so that there should be full co-ordination?

Mr. Carr: What sometimes appears wasteful on paper is often helpful in practice. I think that the House would be well advised not to approach getting relationships too tidy on paper. It is diversity of enthusiasm on the part of a number of people which so often leads to successful results.

Oral Answers to Questions — OVERSEAS INFORMATION SERVICES

Foreign and Commonwealth Visitors(Conducting Officers)

Mr. Mayhew: asked the Secretary for Technical Co-operation on what basis conducting officers for foreign and Commonwealth visitors are selected and trained.

Mr. R. Carr: These officers are provided by the Central Office of Information, the British Council and the Overseas Departments.
The C.O.I. recruits staff in accordance with normal Civil Service practice. They are then given a period of special training. The British Council has a panel of selected guides and interpreters


whom it calls on as required. The Foreign Office, the Commonwealth Relations Office and the Colonial Office provide escorting officers if required, often as interpreters.

Mr. Mayhew: Does the Minister agree that the person who makes the most lasting impression on a visiting delegation is often the conducting officer? Is it not of the greatest importance that he should have the best possible qualifications? Is the right hon. Gentleman aware that there are hundreds of people in this country who, although they may not be qualified or willing to be full-time conducting officers, have a special knowledge and affection for certain countries? Is anything being done to enlist them for this work on a part-time basis?

Mr. Carr: I have indicated that the British Council makes use of part-time people. I believe that the Colonial Office also does. But I will certainly keep in mind the hon. Member's remarks, and draw the attention of other Departments to them.

Information Officers(Technical Training)

Mr. Mayhew: asked the Secretary for Technical Co-operation what facilities exist for the technical training of information officers in Commonwealth and foreign countries.

Mr. R. Carr: The Central Office of Information has held courses for information officers of the Foreign Service and Commonwealth Relations Service since January, 1961. These courses include technical training in all information media and outlets currently used by our overseas missions.

Mr. Mayhew: I am grateful for that reply, but will the Minister bear in mind that what the Plowden Committee recommended was that all information officers in future shall be career diplomats, and that this involves an extension of the training of such people?

Mr. Carr: I recognise that that Plow-den recommendation will almost certainly increase the need for training, but since 1961 all new information officers have been given training before going to posts. I agree that the need may well increase.

Sponsored Visitors

Mr. Matthews: asked the Secretary for Technical Co-operation whether he is satisfied with the arrangements for bringing sponsored visitors to this country; and if he will make a statement.

Mr. R. Carr: Yes, Sir. The estimates provision for visitors sponsored by the British Council and the Central Office of Information has been increased this year to about £1·3 million compared with about £1 million last year. This should enable them to sponsor considerably more visitors than last year when the total was over 6,300. Other Departments also arrange tours for visitors with particular interests in their fields.

Mr. Matthews: I welcome this information. Can my right hon. Friend do still more to encourage these visitors to get around the industrial areas so that they may see for themselves what Britain has to offer the world by way of "know-how"?

Mr. Carr: Yes, indeed. Most visitors wish to spend a certain amount of time in London, but we are encouraging more and more of them—and more and more are finding it profitable and enjoyable—to get well away from London as well.

English Language Teaching

Sir C. Mott-Radclyffe: asked the Secretary for Technical Co-operation whether he is proposing to expand English language teaching overseas.

Mr. R. Carr: Yes Sir. In 1964–65 there has been an increase of nearly £1 million in the estimates provision for the British Council, and a substantial part of this will be devoted to English language teaching.
Under the Aid to Commonwealth English Scheme, we have undertaken to supply 30 English language teaching experts to Commonwealth countries by 1965.

Sir C. Mott-Radclyffe: Will my right hon. Friend do everything he can to facilitate recruitment for this very important work, and the provision of teaching overseas?

Mr. Carr: Yes, certainly, it is very important. The 30 English language teaching experts referred to whom we shall get overseas by next year compare with eight in the field at the present time, and so the House will see that there is a considerable expansion.

Mr. Mayhew: Would not it be helpful if the right hon. Gentleman could get a more general idea of all the different efforts which are being made in this sphere, not only by the British Council, but by B.B.C. experts and by television programmes, universities and Government information services? Could not we be given an opportunity of seeing the whole work of the British Government in this connection?

Mr. Carr: I should very much like to do that, but one of my difficulties in answering the Question is that there are so many people active in this sphere and increasing their activities. We should encourage them to do so. I should welcome any such opportunities that may arise.

Low-Priced Book Scheme

Mr. G. M. Thomson: asked the Secretary for Technical Co-operation what further plans he has for the extension of the Low-Priced Book Scheme.

Mr. R. Carr: The Low-Priced Book Scheme has now been extended, with the publishers' agreement, to 10 further countries, mainly in Africa, which I will, with permission, list in the OFFICIAL REPORT. The Scheme will be limited initially to university textbooks.

Mr. Thomson: Is the Minister aware that there will be a wide welcome for this announcement, belated though it is? Can he say whether he proposes to go ahead and consider whether low-priced books apart from text books might be made available in the 10 countries which he has mentioned?

Mr. Carr: Yes, but we think it better to get the university text books going because we believe that they are the greatest need. Regarding the hon. Member's comment about belatedness, we have not done too badly. In the last year we brought in the whole of West Africa and most of East and Central Africa and one or two other countries as well.

Mr. Bourne-Arton: Would not it be a good idea to have some kind of exhibition so that people may see what sort of books are involved? Will my right hon. Friend consider that?

Mr. Carr: Yes, but I had better not say anything now, because there is a Written Question on the Order Paper today which I shall be answering.

Mr. Rankin: Would the right hon. Gentleman consider introducing a low-priced HANSARD into this scheme?

Mr. Carr: I have a feeling that our friends overseas have plenty of reading of other kinds and can afford the little bit of money if they really want to read all our words of wisdom.

The following is the information:
Kenya, Uganda, Tanganyika, Zanzibar, Ethiopia, Somali Republic, Northern Rhodesia, Nyasaland, Mauritius and the Malagasy Republic.

Oral Answers to Questions — EDUCATION

Careers Masters,West Riding Secondary Schools

Mr. Duffy: asked the Secretary of State for Education and Science what percentage of secondary schools in the West Riding of Yorkshire have a paid careers master and/or mistress.

The Lord President of the Council and Secretary of State for Education and Science (Mr. Quintin Hogg): The local education authority tells me that about two-fifths of its secondary schools have one or more posts carrying special responsibility allowances awarded solely or partly for careers work. Such work is also undertaken in many schools by those holding posts of special responsibility as heads of department or as deputy headmasters or headmistresses, and by the heads of the schools.

Mr. Duffy: What of the remaining three-fifths? Does not the right hon. and learned Gentleman consider it desirable that every secondary school today, not merely those in the West Riding of Yorkshire, should have one member of the staff responsible for providing information to its students about employment possibilities; in other words, acting on the recommendation of the Newsom Report that there should be


at least one member of the staff acting as an essential liaison between schools, parents and the youth employment service? What will he do to urge this view on the laggard L.E.A.s?

Mr. Hogg: I share the hon. Member's enthusiasm for getting careers masters or teachers in every kind of secondary school. Certainly the West Riding authority to which this Question relates made additional posts of special responsibility available on 1st April last and it may well be that some of these go to that purpose. The authority has recently published a booklet of advice. I shall certainly do what I can to encourage local authorities generally to take the same kind of view.

Mr. Willey: While appreciating what the right hon. Gentleman has just said, may I encourage his enthusiasm and encourage him to follow the example of West Riding? Would he consider collating information about the steps very successfully taken in some schools—the careers convention, for instance, in Woodbury Downs School—and brine, that to the attention of all schools?

Mr. Hogg: I have asked my Department to see what further steps could be taken to develop careers posts in secondary schools generally. I am very anxious that this should go forward.

Schools, Walthamstow

Mr. J. Harvey: asked the Secretary of State for Education and Science whether he is aware that 28 per cent. of Walthamstow's schoolchildren are being educated in schools built before 1900 while only 33 per cent. are being educated in post-war schools; and by what date his approvals of new constructions will enable Walthamstow more closely to approach the national average in educational standards.

The Joint Under-Secretary of State for Education and Science (Mr. Christopher Chataway): I understand that 25 per cent. of Walthamstow children are in schools built before 1900 and nearly 34 per cent. are in completely new postwar schools and in schools which have been brought fully up to modern standards. This figure is about the national average.

Mr. Harvey: While I am pleased to note that in terms of post-war schools Walthamstow is thought not to be lagging behind the national average, may I ask whether my hon. Friend considers that the large number of those being educated in schools built in the last century suggests that it is high time that greater priority was now given to replacing these very old schools?

Mr. Chataway: My right hon. Friend recognises the claims of Walthamstow on the major building programme approved for Essex, which for the next two years is valued at £3·9 million and £4·1 million respectively; these figures compare with £1·6 million for the current year.

Mr. Shinwell: When the Minister was bragging on television last night about the remarkable and phenomenal school building programme for which the Tory Government are alleged to be responsible, had he happened to read this Question beforehand?

Mr. Chataway: Yes, Sir. The record of school building by this Government is indeed a creditable one and it is significant that from the Opposition Front Bench, so far as I know, there has been no undertaking to implement larger programmes than we have announced.

Mr. Wiley: The Parliamentary Secretary should know that he is quite wrong. We have discussed the school building programme in previous debates and made quite clear that we regard the present Government programme as wholly unsatisfactory and inadequate.

Mr. Chataway: If this undertaking to implement a programme larger apparently than £80 million a year can be equated with what the hon. Member for Cardiff, South-East (Mr. Callaghan) has said on more than one occasion, I shall be much surprised.

Woodford Green Primary School

Mr. J. Harvey: asked the Secretary of State for Education and Science what plans he has for the reconstruction of the 19th century Woodford Green Primary School.

Mr. Chataway: It was not possible to include this project in the school building programme for 1965–67. My


right hon. Friend will be considering it sympathetically for the 1967–68 programme.

Mr. Harvey: While I am glad to have that assurance, may I ask whether my hon. Friend is aware that the encouraging figures he has suggested for Essex as a whole are not reflected in the urban areas of Essex now incorporated in the Greater London area? Is he aware that this particular school was built in 1820 and that the amount of money spent in patching it up might by now have gone a long way to provide a new school?

Mr. Chataway: I am aware of the condition of this particular school about which my hon. Friend has written to the Department previously, but we must have regard to the priorities chosen by Essex itself——

Mr. Ross: May we take it that the ones to which priority has been given are worse than this one?

Mr. Chataway: —and a large number of replacements. Within the very large programme for the country of £80 million announced for the coming year, there is approximately £50 million for new needs and £30 million for replacements.

Duke of Edinburgh's Award Scheme

Mr. Dalyell: asked the Secretary of State for Education and Science why, out of a total income in 1963 of £69,285, £59,576 was spent by the Duke of Edinburgh's Award Scheme on office and administrative expenses.

Mr. Chataway: I think some misunderstanding may have been caused by the phrase "administrative expenses".
About one half of the expenditure is attributable to office costs. But the other half—described as administration expenses in the accounts—represents the cost of services to authorities and organisations. These include training courses for leaders and adult helpers, displays and exhibitions to promote the interest of young people, practical testing of conditions of safety on expeditions and the maintenance of standards.

Mr. Dalyell: How did this misunderstanding come about?

Mr. Chataway: The hon. Member should perhaps address that question to the Award office, for which of course my right hon. Friend has no direct responsibility, but I am grateful to him for putting this Question down and giving me the opportunity to refute the suggestion that there is an unwarrantably high proportion of the Award Scheme expenses going in office expenses.

Mr. Dalyell: Is the Minister saying that he takes no responsibility——

Mr. Dance: Nevertheless, for the record, would not my hon. Friend agree that this scheme is very much welcomed by all throughout the country and that it is doing a wonderful job?

Mr. Chataway: I am grateful to my hon. Friend. The Department makes a grant of £10,000 to the Award Scheme and I agree entirely as to its worth. The scheme is, of course, concerned principally with administering awards and therefore a high proportion of the expenditure may in a sense be termed administrative.

School Building Survey

Mr. Boyden: asked the Secretary of State for Education and Science to what extent, in formulating school building programmes recently announced, he took into consideration the school building survey which has not yet been made available to the public.

Sir E. Boyle: The larger part of the programmes is allocated to the provision of essential new school places for increasing numbers of pupils and areas of new housing. These factors were not included in the survey. Account was taken of the individual returns of authorities, along with other factors, in deciding the broad distribution of that considerable part of the programmes devoted directly to the improvement and replacement of existing schools.

Mr. Boyden: If the Department has been able to use the survey why has it not been published? Does it turn out that the survey makes such a criticism of the state of the schools that the right hon. Gentleman and the Government are afraid to publish it?

Sir E. Boyle: No. I refer the hon. Member to an Answer given by my right


hon. Friend on the subject on 16th April, in which he explained why the survey material had not been published and that he was considering what form the publication should take.

Mr. J. Wells: Would my right hon. Friend indicate whether there is any geographical split up in this survey, because there is a feeling in the South-East that too much money is being spent in other areas? We should be grateful for an assurance that the South-East, which is the development area with the greatest increase in population, is to have its fair share?

Sir E. Boyle: I am answering this question because the distribution was made before I left Curzon Street. The South-East had its fair share. I am sure my hon. Friend will bear in mind the heavy legacy of old schools in the North-East and the North-West.

Mr. Willey: Does the right hon. Gentleman's inquiry confirm that of the N.U.T., which showed that one-seventh of our primary schools have no water sanitation?

Sir E. Boyle: I would not wish, without notice, to answer questions on particular details. The questionnaire was considerably more complicated than the inquiry by the Union, and this had implications in the collection and processing of the material.

School Building, Wales (Consortium)

Mr. J. Griffiths: asked the Secretary of State for Education and Science having regard to the saving of 12½ per cent. in building costs through the bulk purchase of standard components by the consortium of 10 education authorities in Wales, what steps he is taking to bring the other education authorities in Wales within the consortium; and what is his estimate of the saving on the cost of the current building programme if all the authorities joined the consortium.

Mr. Hogg: This matter was brought to the attention of all local education authorities by my Department's Circular 1/64 of 28th February last. I am sending the right hon. Gentleman a copy and I welcome the opportunity of giving it further publicity. Although I cannot estimate the additional saving I hope that more authorities in Wales will

recognise the advantage of joining the consortium, although this is a matter for them to decide.

Mr. Griffiths: Does not the right hon. and learned Gentleman agree that a saving of £30,000 on schools' bulk purchase tenders in one year is a very creditable performance? Does it not prove that, if other local education authorities in Wales and elsewhere adopt this method, they will save a great deal of money for the ratepayers and taxpayers'?

Mr. Hogg: I entirely agree with the right hon. Gentleman. I have always done what I could to encourage consortia of this kind.

School Building, Carmarthenshire

Mr. J. Griffiths: asked the Secretary of State for Education and Science how many school buildings in Carmarthenshire tall below the standard set by his Department; and why he has cut the school building programme of the county education committee by over £500,000.

Mr. Hogg: Information is not readily available about the present number of school buildings in Carmarthenshire which fall below the standards specified in the Standards for School Premises Regulations, 1959. For the 2½ year period beginning 1st April, 1965, major school building projects to the value of £738,000 have been programmed for Carmarthenshire. I am satisfied that these take appropriate account of relative priorities and are equitable in relation to the needs of the Authority and of other authorities.

Mr. Griffiths: Is the right hon. and learned Gentleman aware that in one school in particular, the modern secondary school at Ammanford, pupils spend a great deal of time during the day moving from one building to the other? Will he ensure that priority is given to this matter in any future plans?

Mr. Hogg: I will take note of what the right hon. Gentleman has said about that school.

Mrs. White: Will the right hon. and learned Gentleman explain what is the use of having regulations if one is not aware whether or not they are being observed?

Mr. Hogg: That is a very good question, if I may say so. What I said was that it would be difficult to get information in the form asked for by the right hon. Member for Llanelly (Mr. J. Griffiths). But, of course, the regulations are for application by individual authorities.

Oral Answers to Questions — SCIENCE

Torry Research Station, Aberdeen

Mr. Hector Hughes: asked the Secretary of State for Education and Science if he will make a statement on the work of the Torry Research Station, Aberdeen.

The Minister of State for Education and Science (Sir Edward Boyle): The Torry Research Station of the Department of Scientific and Industrial Research studies properties affecting the quality of fish as food and aims to improve preservation methods and also the equipment and procedures used at sea or on land in handling, storing, processing, and distributing fish. It collaborates closely with the White Fish Authority, the Herring Industry Board and the various sections of the fish industry.

Mr. Hughes: Does the Minister realise that the most important aspect of this very useful work carried on by the Torry Research Station lies in its application to trade and industry with a view to facilitating not only British trade but British exports? Will he address his mind to that aspect and make a comprehensive statement on that?

Sir E. Boyle: I am not sure that the House would welcome a comprehensive statement at Question Time, but the hon. and learned Member is quite correct in saying that the work of the station is of immediate importance and application. It is concerned with the handling and treatment of fish straight from the sea, as it were, freezing, cold storage, smoking and prevention of deterioration. We have all these aspects very much in mind.

Research and Development(Northern Ireland)

Mr. Stratton Mills: asked the Secretary of State for Education and Science what percentage of the cost of

research and development for which he is responsible is carried out in Northern Ireland and in development districts, respectively.

Sir E. Boyle: 9·5 per cent. of the expenditure of the four Research Councils is in support of research institutions in development districts, and rather less than ½ per cent. in support of institutions in Northern Ireland. 14 per cent. of the Atomic Energy Authority's expenditure is incurred in development districts.

Mr. Stratton Mills: asked the Secretary of State for Education and Science what steps he is taking to ensure that an adequate portion of the research and development carried on by his Department takes place in Northern Ireland.

Sir E. Boyle: The primary consideration in carrying out a programme of research and development must be scientific efficiency. Subject to this, however, the Research Councils have for some years been requested to bear in mind the needs of areas of high unemployment, including Northern Ireland. The results of research are, of course, available to the whole country.

Mr. Stratton Mills: Does not my right hon. Friend recognise the importance of having this kind of work widely spread in development districts and in Northern Ireland? In view of the figures he gave me in answer to Question No. 30, showing that only ½ per cent. of this work is being done in Northern Ireland, will he consider situating the next research station in Northern Ireland?

Sir E. Boyle: We must realise that the primary purpose of these stations is research and development and that they must be situated where they can operate most efficiently. But my right hon. and learned Friend is aware of the importance of all these matters to Northern Ireland and we shall certainly bear it in mind carefully when, for example, dealing with subjects like research grants to universities and postgraduate awards.

Mr. Lawson: Is not the right hon. Gentleman aware that the location of this research is perhaps at this time the most important factor determining the


location, and the continuing location, of industry? Will he bear this in mind when considering where these stations shall be?

Sir E. Boyle: Certainly, research institutions closely connected with an industry should, if possible, be situated near the centre of that industry. I agree that the two things are closely linked together.

Oral Answers to Questions — POLITICAL HONOURS SCRUTINY COMMITTEE

Mr. Lipton: asked the Prime Minister on what dates the Political Honours Scrutiny Committee has met in 1964.

The Prime Minister (Sir Alec Douglas-Home): The Committee has not met so far this year but will be meeting shortly.

Mr. Lipton: Will the Prime Minister give an undertaking that he will not ask the Committee to work overtime in connection with the unusually long list of political honours that he will submit for the Birthday Honours List?

The Prime Minister: I do not know what information the hon. Gentleman has, but I think he had better wait and see the Honours List first.

Mr. Bottomley: Is it within the competence of the Committee to rename an honour—for instance, suggesting that the Order of the British Empire should become the Order of the British Commonwealth?

The Prime Minister: I should like notice of that question.

Mr. Emrys Hughes: What procedure is adopted by this Committee? How does it scrutinise the names of these gentlemen? Does it call for a report from Scotland Yard? Can anyone object to them?

The Prime Minister: I would not think that to be necessary. All the names that go before the Committee are of well-known persons anti I think that it does its work in a way acceptable to both sides of the House.

Oral Answers to Questions — MINISTER OF HOUSING AND LOCAL GOVERNMENT(SPEECH)

Mr. W. Hamilton: asked the Prime Minister whether the public speech made by the Minister of Housing and Local Government in London on Wednesday, 29th April, to the Town and Country Planning Association on the Government's plan for South-East England represents the policy of Her Majesty's Government.

The Prime Minister: Yes, Sir.

Mr. Hamilton: Does the Prime Minister recollect that the Minister said in that speech that it was estimated that 270,000 immigrants from Scotland and the North-East would come into the South-East between now and 1981? Is the Prime Minister aware that there is a good deal of concern, certainly in Scotland and, I believe, in the North-East, about this tacit admission by the Government that immigration to the South-East is inevitable from Scotland and the North-East and that the most the Government hope to do is to slow it down?

The Prime Minister: The figure given by my right hon. Friend was that of immigration into the South-East from all over Britain. What we are trying to do is to arrest the drift from Scotland and the North-East. I have here some figures of applications by industrialists to go to Scotland and they are very encouraging. I hope that the hon. Gentleman will help us try to get industry to Scotland and not write it down all the time.

Mr. J. Wells: Is my right hon. Friend aware that people in the South-East are more concerned about immigration from overseas than from within the United Kingdom? Is he also aware that we are most anxious about the rate of school building in the South-East?

The Prime Minister: Of course, there will be a great increase of population in the next 35 years in Britain as a whole—about 14 million—and about a quarter of that, or 3 million, will be in the South-East.

Mr. Jay: Is the right hon. Gentleman aware that what worries us is that the Government's plans now provide for an


increase in the rate of immigration into the South-East over the next 20 years?

The Prime Minister: Our plans do not provide for that. They recognise what is likely to happen. We are trying to do our best, through our regional policies, to prevent an undue flow of population from the North-East and Scotland. If the right hon. Gentleman thinks that he should direct people where to go, that is a different matter.

Mr. Longden: In view of the expected very large increase in population, will my right hon. Friend consider inaugurating, instead of family allowances, big bonuses for bachelors?

Oral Answers to Questions — NUCLEAR WEAPONS

Mr. A. Henderson: asked the Prime Minister what representations he has made to President Johnson and Mr. Khrushchev, with a view to preventing the proliferation of nuclear weapons, in view of the information in the possession of Her Majesty's Government that the Governments of Egypt and Israel are producing small missiles with a radioactive fall-out.

Mr. Grimond: asked the Prime Minister what steps Her Majesty's Government propose to take to stop the spread of nuclear weapons in the Middle and Near East; and if he will make a statement on relations with Egypt and Her Majesty's Government's policy towards her.

The Prime Minister: We have no information that the Government of the United Arab Republic or Israel have decided to produce or are about to acquire nuclear weapons of any kind. An agreement to ban the dissemination of nuclear weapons is important for the security not only of the Middle East but of the whole world and we are trying to achieve such an agreement at the Geneva Disarmament Conference.
Since the resumption of diplomatic relations, we have made every effort to establish friendly and businesslike relations with the United Arab Republic. President Nasser's recent speeches and declarations have inevitably caused a setback to our efforts, but we will not be diverted either from our peaceful pur-

poses or from our duty to protect our friends to whom we have treaty obligations.

Mr. Henderson: Does not the real danger lie in the fact that German scientists in the employment of the Egyptian Government are working on the development and production of rockets and other missiles, which can only lead to an intensification of the arms race between Israel and Egypt and upset stability in the Middle East? Would not the Prime Minister agree that this all underlines the urgency of President Johnson's proposal for securing an agreement to freeze the production of all vehicles of delivery, including rockets?

The Prime Minister: I think that it is very important to try to get non-dissemination agreements. I absolutely agree with the right hon. and learned Gentleman on that. I take it that his Question is really talking about nuclear weapons—that is, nuclear warheads. We have no evidence that either Israel or Egypt is trying to produce weapons of that kind.

Mr. Grimond: Is it not clear that, though they may not be producing these weapons now, they will soon be in a position to do so, and does not this make it necessary to look again at the Tripartite Declaration about arms for the Middle East? Would the Prime Minister consider consulting the signatories to that Declaration and other interested Powers as to whether it can now be made a reality? We welcome the Prime Minister's statement about our relations with the United Arab Republic, but can he give an assurance that the spirit of Suez is finally laid?

The Prime Minister: I think Suez was laid long ago. The state of affairs in the Middle East does not depend on our good will alone. There must be some reciprocity. We have seen precious little of this up to now. The right hon. Gentleman said that one or other of these countries—Egypt or Israel—is likely to get nuclear weapons quite soon. This is not at present our view.

Mr. H. Wilson: I agree with the Prime Minister about the importance of an agreement to stop the proliferation of nuclear weapons, but does not the Prime Minister remember that we on this side


of the House repeatedly pressed on the Government two years ago and more the dangers inherent in all these German scientists working on missiles in Egypt and asked the Government to take it up urgently with the German Government at that time? Will the Prime Minister say whether this was done, and with what result? In addition to the world-wide anti-proliferation agreement, does not the right hon. Gentleman feel that it would have been wise, and that it would still be wise, as we have frequently suggested, to try to get specific areas of the world to be agreed as being nuclear-free areas, including the Middle East, including Central Europe, and including perhaps the whole Continent of Africa?

The Prime Minister:: If the countries in any particular area wish to form themselves into a nuclear-free zone, that would certainly be supported by Her Majesty's Government. We are trying very hard to get a wider agreement at Geneva, which is wanted.

Mr. Kershaw: Is my right hon. Friend able to form any estimate of how far the very large American subventions to the U.A.R. assist it in this very expensive research?

The Prime Minister: I do not think I would wish to comment on that at present. What we are trying to do is to get the countries of the Middle East to live at peace with each other and ourselves. If frontiers are respected and subversion is abandoned, we have some hope of doing this, otherwise very little.

Mr. H. Wilson: Does not the Prime Minister feel that it is not enough just to sit back and wait, for example, for the countries of the Middle East to get together and agree that it would be nice to have a nuclear-free zone? Does he not feel that the degree of fear and mistrust which Israel and her Arab neighbours have for one another make it quite unrealistic to talk in these terms? Should not the Government now, belatedly, be taking the initiative in trying to get a world agreement and world pressure to give confidence in areas such as that that there will be these areas totally free of nuclear weapons now and for all time in the future?

The Prime Minister: Yes. The objective I have is exactly the same as

that of the right hon. Gentleman. He must remember that these nations are independent nations. They are capable of making up their own minds. [HON. MEMBERS: "Oh."] I hope they are. There was a proposal among the African countries to have a nuclear-free zone in Africa, but it got nowhere. We must wait and see if these Middle East countries can agree to this.

Sir C. Osborne: Would my right hon. Friend agree that the greatest danger to world agreement comes from China, which is prepared to give of her resources much more freely than Moscow is? Is any attempt being made between the Americans, ourselves and the Russians to bring the Chinese into agreement on this world-wide problem?

The Prime Minister: If we could get agreement among the countries talking at Geneva, then there is a proposal in the United States disarmament plan that China should be brought in on it. So there is very little difficulty about this, provided that there is agreement among, themselves. Even then, I do not think that the Chinese would join a non-dissemination agreement; but that remains to be seen.

Mr. Wigg: When the right hon. Gentleman informed the House that he wanted good relations with the United Arab Republic and that the spirit of Suez had been finally laid, had he in mind the statement he made in a broadcast in Ottawa on 11th February, when he pleaded and expressed regret that he was not allowed to do what he wanted to do with Egypt without being interfered with?

The Prime Minister: If I remember rightly, I was asked a question about the American attitude to our policies at the time. I expressed the opinion that, on the whole, it would have been better if they had left us alone.

Oral Answers to Questions — WORLD PEACE(SUBVERSION)

Mr. Goodhew: asked the Prime Minister whether he will raise in the Security Council, as a threat to world peace, the use of subversion by member States to overthrow the legitimate Governments of other States.

The Prime Minister: This is a question more appropriately considered in the General Assembly and it has in fact been considered by the Sixth Committee.

Mr. Goodhew: Is my right hon. Friend aware that at this moment there are Egyptian troops and arms in the Yemen, there are tribesmen armed with Egyptian arms and weapons in the Federation of South Arabia, there are Indonesian guerrilla troops in Malaysia, there are Congolese terrorists in the Congo, and there are now reports of Cairo-trained terrorists in Southern Rhodesia, apart from the fact that certain independent African countries are threatening to train terrorists for activities in Southern Rhodesia and South Africa? Does not my right hon. Friend agree that these are a much greater threat to world security and peace than the domestic policies of Southern Rhodesia and Africa? Should they not, therefore, be much more urgently investigated by the United Nations?

The Prime Minister: Yes, and when I spoke to the United Nations in the autumn I drew particular attention to the question of subversion and said that there could not be any hope of world peace until it was abandoned—and abandoned by the Soviet Union and by the Chinese. Of course it goes on. I am aware of the facts in respect of Indonesia and the Federation of South Arabia. We have ourselves brought this matter to the attention of the Security Council and to the attention of the President, and we will take any further steps that are necessary. As to Indonesia, any action in the United Nations would be for the Malaysians.

Mr. M. Foot: The Prime Minister speaks of the need to stamp out subversion. Could he tell the House whether he thinks that the United States Government are attempting to subvert the Government of Cuba?

The Prime Minister: I have no evidence of that sort. I think that the hon. Gentleman knows that the United States would like to see trade with Cuba limited. He also knows, I think, that I and the Government have resisted this.

Mr. Biggs-Davison: Would the Prime Minister consider suggesting to the

Secretary-General that he circularise all the members of the General Assembly of the United Nations reminding them of the Assembly's unanimous resolution in favour of peaceful coexistence and non-interference in the internal affairs of other member States?

The Prime Minister: Yes, and this matter has, as I said in my original Answer, been considered by the Sixth Committee, but I regret to say that it came to no very definite conclusion

Oral Answers to Questions — YEMEN (DEATHS OF BRITISH SOLDIERS)

Mr. Rankin: asked the Prime Minister if he will make a further statement on the mutilation of the bodies of British soldiers in the Yemen.

The Prime Minister: No, Sir. I have nothing to add to my statements of 4th and 5th May.

Mr. Rankin: Is the Prime Minister aware that since making his statement Major-General Cubbon has gone on record as saying that he is delighted that the Americans have found no evidence to confirm his story, and will he look at that point? Will he also tell me why it was that the names of the dead soldiers were published before the relatives were officially informed? Is not that a violation of accustomed practice?

The Prime Minister: My right hon. Friend the Secretary of State for Defence has sent new instructions round all military commands, and I hope that none of these regrettable affairs will, therefore, happen again.

Mr. Shinwell: Does not the right hon. Gentleman agree that it is somewhat premature to condemn the General Officer Commanding in this area before the whole of the facts have been investigated? Will he take into consideration the difficulties experienced in this terrain by both officers and men and endeavour to discover what were the actual difficulties which led to the somewhat premature announcement about the alleged mutilation of some of our troops? Will he bear in mind that it is customary—indeed, constitutional and a tradition of this House which has been


upheld by all Governments we have known this century and probably before that—that if any action is taken by either an officer or civil servant in the employ of the Government, the responsibility rests with the Ministers concerned?

The Prime Minister: Yes, Sir. I have never condemned this officer. As I said in the House the other day, in moments of great stress, emotion and anger things can be said which may be very unfortunate. But I think that there is a need in these days, when Press conferences have to be held, perhaps to clarify the instructions; and that I have done.

BUSINESS OF THE HOUSE

Mr. H. Wilson: May I ask the Leader of the House whether he will state the business of the House for next week?

The Lord Privy Seal (Mr. Selwyn Lloyd): Yes, Sir. Before giving the House the business for next week, may I say that, in addition to the business already announced, the Government propose today to facilitate consideration of the Second Reading of the New Forest Bill [Lords], which, as the House will know, is a Private Member's hybrid Bill.
MONDAY, 11TH MAY—Second Reading of the Malawi Independence Bill, Lords Amendments to the Harbours Bill, and to the Succession (Scotland) Bill.
Motions on the Winter Keep Amendment Schemes, the Ploughing Grants Schemes, and on the Eggs (Guaranteed Prices) Order.
TUESDAY, 12TH MAY, and WEDNESDAY, 13TH MAY—Resale Prices Bill:
Remaining stages.
THURSDAY, 14TH MAY—Remaining stages of the Malawi Independence Bill, and of the Hire Purchase (No. 2) Bill [Lords].
If progress on business allows, it will be proposed that on FRIDAY, 15TH MAY, the House should rise for the Whitsun Adjournment until TUESDAY, 2ND JUNE.

Mr. Healey: Would the right hon. and learned Gentleman agree that a Minister who made a statement on a major matter of public importance knowing it to be untrue, and with intent to deceive the

House, should resign, together with those of his colleagues who were privy to the deceit?
If the right hon. and learned Gentleman agrees about this, will he take the occasion next week to make a personal statement on the report which is widely published in the United States that, contrary to statements which the right hon. and learned Gentleman himself frequently made in this House, he met the Prime Minister of Israel and the French Foreign Minister near Villacoublay, in France, a week before the Israeli attack on Suez?
If the right hon. and learned Gentleman is prepared to deny this statement will he take legal action against Mr. Herman Finer?

Mr. Speaker: Order. I cannot allow any of that on the business Question.

Mr. Stratton Mills: Is my right hon. and learned Friend aware that there may be a desire in certain parts of the House to have a debate to discuss the desirability of ensuring that May Day and the Cup Final do not coincide?

Mr. Short: Is the Leader of the House aware that on Friday last, for the third week running, a group of his hon. Friends again prevented the Public Service Vehicles (Travel Concessions) Act, 1955 (Amendment) Bill from having its Second Reading, so preventing millions of old, blind and disabled people from continuing to enjoy the concessionary fares they have had for many years?
Will the Government now allow a little time for the Second Reading of the Bill, and since it is obvious that the right hon. and learned Gentleman does not understand the Bill, will he meet me to discuss it some time in the near future?

Mr. Lloyd: I am certainly prepared to meet the hon. Gentleman and any other hon. Member who wishes to talk to me about the Bill, but I cannot yield to his suggest ion next week.

Mr. H. Wilson: Ts the Leader of the House not aware that in 1955, on the eve of the General Election, the Government—although they had not much time before the dissolution—provided time for my hon. Friend's Bill, dealing


with travel concessions, to go through, but because of the circumstances put in this condition: that it should apply only to routes operating in November, 1954? In these circumstances will the right hon. and learned Gentleman enter into discussions with us to see whether Government time can be provided to bring that Bill up to date and thereby follow the precedent that his Government set in April, 1955?

Mr. Lloyd: That is why I should first talk to the hon. Member for Newcastle-upon-Tyne, Central (Mr. Short).

Sir Knox Cunningham: Would my right hon. and learned Friend confirm that he will be implementing later this Session the undertaking that was given last Session about a debate on Northern Ireland?

Mr. Lloyd: I will arrange for such a debate, though I am not at present able to say exactly when it will take place.

Mr. Loughlin: Will the Leader of the House look again at the business for next week in an effort to enable the House to discuss the serious situation in Aden? Is he aware that the resumption of operation "Nutcracker" is likely to endanger a far greater number of our boys than are at present in danger, and that this is a matter of urgency? Will he revise the business programme for next week to allow us to debate this matter?

Mr. Lloyd: I hope that we will be able to have a debate on foreign affairs before long, but I cannot hold out any hope of altering the business for next week.

Dame Irene Ward: Can my right hon. and learned Friend say whether we will be receiving the Report of the Committee of Privileges before the House rises for the Whitsun Recess?

Mr. Lloyd: I have nothing to say on that point today.

Mr. Wigg: Since the right hon. and learned Gentleman has stated that he hopes that the House will adjourn on Friday of next week if business is completed, would he consider letting the House debate the question whether the spirit of Suez has been laid and, if it has, where?

Sir C. Osborne: Was my right hon. and learned Friend advised, with the usual courtesy of the House, by the hon. Member for Leeds, East (Mr. Healey), of the beastly, filthy attack which he made on him and his character a few moments ago?

Mr. Speaker: Order. Not on next week's business.

Mr. Warbey: Can the right hon. and learned Gentleman now tell the House on which day the Motion for the Adjournment for the Whitsun Recess will be taken so that we can have an opportunity, if necessary, of tabling Amendments to it in advance and avoid the difficulties which arose before the Easter Recess?

Mr. Lloyd: I hope that the Motion will be taken on Thursday.

Mr. J. Rodgers: Could my right hon. and learned Friend say whether my right hon. Friend the Secretary of State for Education and Science will be able next week to make a statement about the Government's attitude towards management education?

Mr. Lloyd: Not without notice.

Mr. Wigg: Will it be in order, on the Motion for the Adjournment of the House—which, presumably, will be taken on Thursday, although I would be obliged if the right hon. and learned Gentleman would confirm that—to have a debate, whether or not the right hon. and learned Gentleman likes it, on the question of the Yemen and Aden?

Mr. Speaker: If the hon. Member seeks to apply, I will consider the matter, but it does not arise now.

Mr. Loughlin: While I appreciate that the Leader of the House has promised us a debate on foreign affairs, is he aware that if we are to wait, not until next week but until the House comes back after 2nd June, it does not meet the situation in Aden? Because of the need to deal with this matter urgently, will the right hon. and learned Gentleman reconsider the question?

Mr. Lloyd: I will certainly consider anything that the hon. Gentleman puts forward, but I am not wholly convinced that a debate at present would be the


wisest course to take. In any case, I cannot hold out any hope of altering next week's business.

Sir H. Legge-Bourke: On a point of order, Mr. Speaker. Can you advise the House what the remedy is for the hon. Member concerned when a foul attack has been made against him and that attack is then ruled out of order by the Chair, the result being that the foul innuendo is left in the air, without an opportunity being given for it to be answered here?

Mr. Speaker: It is clear that it cannot be dealt with now. That is why I greatly deplore it on either side of the House. I emphasise that two whites do not make a black, so we do not get any further. But the matter can no doubt be dealt with by an appropriate Motion, which I would consider.

Mr. Wigg: I have not the slightest wish, Mr. Speaker, to differ from what you say, but if there is to be an Adjournment of the House there must be a Motion to adjourn the House, and the debate on that Motion would provide ample opportunity to say the things that we want to say. I therefore think that I was in order in asking that the Leader of the House should put the Motion on the Order Paper, and not, as he did before, put it down without giving hon. Members an opportunity to be present when it is debated.

Mr. Speaker: I did not understand the hon. Member to be asking when that particular Motion was going on the Order Paper. I thought that he was sating something else.

Mr. Healey: I should like your guidance, Mr. Speaker. When is it possible

to put a question to the Leader of the House? If it is not possible to put a Question on the Order Paper, is there any other occasion, other than during business questions on a Thursday?

Mr. Speaker: All the matter we can cover on the business question is what arises from the Answer, and the Answer is the business for next week——

An Hon. Member: And the hon. Gentleman knows it jolly well.

Mr. Speaker: There is no other way of dealing with the matter.

Mr. Lloyd: In reply to the question asked by the hon. Member for Dudley (Mr. Wigg), I earlier said that the Motion for the Adjournment would be taken on Thursday.

BILL PRESENTED

EMERGENCY LAWS (RE-ENACTMENTS AND REPEALS)

Bill to repeal the remaining Defence Regulations (that is to say those set out in the Emergency Laws (Repeal) Act, 1959), except the Defence (Armed Forces) Regulations, 1939, and to reenact certain of those Defence Regulations with modifications; and to continue for limited periods the Ships and Aircraft (Transfer Restriction) Act, 1939, and certain powers of the Board of Trade relating to jute products, presented by Mr. Green; supported by Mr. Christopher Soames, Mr. Noble, Mr. Anthony Barber, the Attorney-General, Mr. Edward du Cann, and Vice-Admiral John Hughes Hallett; read the First time; to be read a Second time Tomorrow and to be printed. [Bill 143.]

FINANCE BILL

Order for Second Reading read.

3.43 p.m.

The Financial Secretary to the Treasury (Mr. Alan Green): I beg to move, That the Bill be now read a Second time.
I hope that it will be convenient if I follow the usual procedure, and go through the Bill in order, bringing to the attention of the House points where some words of explanation may be helpful not only for today's debate, but in preparation for the Committee stage. I appreciate that this is not a glamorous exercise, but I hope that it will not be unhelpful.
The first four Clauses and the first five Schedules are related. They give effect to the main revenue provisions of my right hon. Friend's Budget—the increase in the rates of duty on alcoholic drink and on tobacco. The new rates of duty are set out in detail in the Schedules.
The Clauses and Schedules also provide for a number of other changes in fulfilment of our obligations to our trading partners in the European Free Trade Association. Under the E.F.T.A. Convention, we are committed to the removal, by the end of 1964, of the protective element from the revenue duties on industrial products, and the Bill gives effect to that commitment. It completes a process that has been carried out in three steps, starting in 1962. The general principle we have followed, and to which the Schedules give effect, is that the duty charged on products imported from E.F.T.A. countries should be the same as the duty burden which would fall on a manufacturer of similar goods produced in this country.
The protective element which remained before the Budget in the duties on spirits, beer, and tobacco products was in each case very small; it has now been removed by increasing the rate of Customs duty on goods of E.F.T.A. origin by slightly less than the amount of the increase in the Excise duty. Other international commitments have made necessary some other small and consequential adjustments in the rates of Customs duty on goods of Commonwealth origin and on foreign products.
Clauses 5 and 6 are concerned with hydrocarbon oil. With effect from 1st January next, Clause 5 brings the Excise duty on indigenous light oil into line with the Customs duty on similar imported oil. This change is also one which flows from the obligations we have accepted under the E.F.T.A. Convention. But while, in the other cases I have just mentioned, it has been possible to meet our E.F.T.A. commitments by altering the Customs rate of duty to make it agree with the duty burden on the home producer, in the case of hydrocarbon oil it has been necessary to do the reverse.
This is because the overwhelmingly greater part of our supplies of oil come from abroad and pay duty at the Customs rate. It would not have been possible to have a lower rate of Customs duty on oil imported from E.F.T.A. countries for, if that had been done, it would have been possible for crude oil produced in the Middle East to be refined in an E.F.T.A. country and then sent here at a lower rate of duty than it would have paid if it had passed through a refinery in this country.
Clause 6 and Schedule 6 provide for two schemes for relief from duty. A number of hon. Members on both sides of the House have taken an active interest in the representations that have been made year by year for relief from duty on oils, such as white spirit and benzene, which are used as materials or as solvents in industrial processes. In his Budget speech last year, my right hon. Friend accepted in principle the case for this relief, and the Clause will Give effect to his decision.
The scheme of relief contemplated in the Clause has been worked out with the industries concerned. It is that oil will be allowed to be delivered duty-free for this kind of industrial use if it is "marked" with a chemical additive that would enable its misuse to be detected. But, to provide for circumstances in which the use of a suitable additive may not be practicable, the Clause provides, as an alternative, that oil can be delivered unmarked on payment of the usual duty; and that this will be repaid to the user when he shows that he has used the oil for a purpose that entitles him to relief.
The second scheme involves rather more technical matters. I understand that there may be technical advantages—at least, in certain industries—in the use of some of the lighter petroleum distillates as an alternative or an additional source of furnace fuel. At present, these possibilities cannot economically be developed; the distillates in question fall within the Revenue classification of light oil and so are liable to duty at the full rate of 2s. 9d. per gallon, as against the 2d. a gallon paid on ordinary fuel oil.
The Clause will enable the potentialities of these fuels to be explored, under suitable safeguards, by reducing the duty on them to the fuel oil rate when they are used as furnace fuel. In this way, the Clause may help towards a better balance of production at British refineries by encouraging the demand for the lighter petroleum fractions, as compared with the heavy oils. The Clause, which comes into operation on 1st September, empowers the Commissioners of Customs and Excise to make regulations governing all these arrangements for relief from duty.
Clause 7 reduces the rates of the pool betting duty and the bookmakers' licence duty and, at the same time, it extends the scope of the pool betting duty so as to cover fixed-odds coupon betting as well as pool betting. In this way, it removes the complaint of unfair competition which arose from the fact that money staked on football pools was subject to the duty while money staked at fixed odds—perhaps on the results of the same football matches—was not. The rise in the volume of fixed-odds coupon betting in recent years has been accompanied by a fall in the yield of the pool betting duty; so that this change should help to safeguard the revenue.
This is a rather lengthy Clause, because it has to apply to fixed-odds coupon betting the machinery for collecting duty which has hitherto applied to pool betting. It does so with some modifications which are necessary because of differences in the method of promoting fixed-odds coupon betting compared with the promotion of pool betting. Subsection (2) is an anti-avoidance provision relating to pool betting. It provides that any payment which a punter makes in connection with

a dutiable bet will be chargeable with duty—even if it purports not to be part of the stake money—unless it is a voluntary donation for a charity or for the furtherance of sport.
Clause 8 continues until the end of August, 1965, the existing power to use the Customs and Excise regulator, but it makes one important change. As the law stands at present, the regulator, if it is applied at all, must be applied in the same way, whether by surcharge or rebate, to all the main Customs and Excise duties and to the Purchase Tax, but circumstances could arise in which this blanket approach would be unsuitable and when it would be undesirable to apply the regulator over the whole field.
To meet this sort of situation, the Clause divides the duties into four groups—tobacco, alcoholic drink, oil, and the others including the Purchase Tax—and it enables the regulator to be applied to one or more of these groups without having to be applied to all of teem. To use the example which my right hon. Friend gave in his Budget speech, if it should be necessary in future to raise more revenue by means of the regulator, this would not necessarily involve the further imposition of tax on tobacco or on alcoholic drinks. I trust that this proposal to permit the more flexible use of the regulator, should the need arise, will commend itself to the House.
Clause 9 provides that the television advertisement duty will no longer be charged after 29th July, 1964, when it will be replaced by the levy which will become payable by the programme companies under the Television Act, 1963. The Clause preserves until the end of this year the powers needed by the Commissioners of Customs and Excise to clear up any questions outstanding in respect of duty on advertisements broadcast on or before 29th July.
Clause 10 is a short Clause which removes a disadvantage from which British ships and aircraft have occasionally suffered in the past. It enables them to take on board sufficient quantities of duty-free stores to meet the reasonable reeds of passengers who wish to take advantage of the duty concession which British and foreign Customs administrations allow.
Clause 11 gives exemption from Excise duty on certain vehicles modified so that they may be driven by invalids. In the Finance Bill debate last year the hon. Member for Cardiff, South-East (Mr. Callaghan) and other hon. Members put down a new Clause to raise the weight limit of the present concession for invalid vehicles. As my hon. Friend the Minister of State, Board of Trade, then the Economic Secretary, explained at the time, this proposal as it stood would not have provided sufficient guidance to the local taxation authorities in recognising the invalids and the vehicles eligible for exemption.

Mr. Douglas Houghton: The hon. Gentleman's reference to Clause 11 gives me the opportunity of pointing out to him that I have already received a complaint about the hurtful title to the Clause in the use of the word "invalids". The word "invalids" is not mentioned in the Clause, but it is in the description. I understand that the description is not open to amendment in Committee. Will the hon. Gentleman therefore kindly consider changing this in a later publication of the Bill?

Mr. Green: I will certainly take that into consideration. As the hon. Member knows, I have not had notice of the point, but, of course, I do not complain of that.
Clause 11 provides that the registered owner of a modified vehicle will be eligible if his disabilities qualify him for the provision of transport by the Health Departments. In most cases this will mean that his vehicle will have been adapted with the help of one of the two Health Departments. The appropriate Department will be able to provide an invalid with a certificate stating the facts establishing his eligibility for an exempt licence under the Clause. He will then be able to send the certificate to the local taxation authority with his application for an exempt licence. I am sure that the extension of the present concession to disabled drivers brought about by Clause 11 will be welcomed on both sides of the House.
I should make it clear so that there is no doubt about it that in cases where by private beneficence a carriage has been adapted for an invalid the same

test will be applied. If one of the two Health Departments would have done the job, but it has been done privately, the invalid is still entitled to receive a certificate.

Mr. G. R. Mitchison: Is any difficulty anticipated in finding out whether or not a disability is of the kind where grants are paid?

Mr. Green: I know of none anticipated, but again, having had in a sense a warning in that probing question, I will look further into the matter in answer to the hon. and learned Member.
I come now to the Income Tax and Profits Tax provisions in Part II of the Bill. Clause 12 reimposes Income Tax for 1964–65. Clause 13 prescribes the Surtax rates for 1963–64.
Clause 14 removes a difficulty which arises when a trading company transfers part of its business to another company. At present, when this happens there is a double assessment. The transferee company is charged to Income Tax for a period on the current profits arising after the transfer under the "commencement" rules for new businesses. The transferor is also liable for the same period on the "preceding year" basis on the profits up to the transfer date. This fact may well hinder company reconstructions which are desirable in the interests of efficient organisation.
Under Clause 14 the transfer of part of a trade will no longer be treated as the setting up of a new trade by the transferee where there is a 75 per cent. common control. This will produce a result similar to that already produced by Section 17 of the Finance Act, 1954, when the whole of a trade is transferred to an associated company. The preceding year basis will apply throughout and the two companies will share the Income Tax liability for the year of change on the profits of the transferred part of the trade.
Clause 15 carries out my right hon. Friend's proposal to widen the scope of the provisions enabling a United Kingdom company to claim double-taxation relief when it receives a dividend from an overseas company in which it holds shares. It is concerned with what I can conveniently call the "underlying tax"


paid overseas. The House will appreciate that I am not talking now about the overseas tax charged on the dividend itself, far example, by withholding at source, but about the tax paid by the company declaring the dividend on the profits out of which the dividend comes.
Even apart from the terms of any double-taxation agreements between us and the other country concerned, a United Kingdom company with a large enough holding in the company paying the dividend has been able for many years to claim double-taxation relief in respect of the underlying tax. Up till now, the shareholding required was one carrying at least one-half of the voting rights, though hon. Members will remember that two years ago special provision was made for certain cases where so large a holding was precluded by the law or the administrative practice of the overseas country concerned.
After further study of the matter, my right hon. Friend concluded that he would be justified in lowering the qualifying holding to one that controls one-quarter of the voting power. This will apply generally and will enable us to dispense with the special provisions covering cases where a local limitation was in force.
The next three Clauses, 16 to 18, together with Schedule 7, deal with the use of leasing devices for tax avoidance which was briefly mentioned by my right hon. Friend in his Budget speech. The devices take different forms, and the three Clauses propose remedies to suit each case. In framing the proposals, our endeavour has been to put a stop to the tax avoidance without getting in the way of legitimate business transactions.
Clause 16 deals with assets other than land used for the purpose of a business or of some other taxable activity so that the payments for use of the asset qualify for tax relief as deductions either in computing profits or in one of the other ways described in subsection (4). The basic device with which Clause 16 is concerned is one in which a trader has new plant leased to him with the rent squeezed into the early years of the lease so that over a short period the capital cost of the plant plus interest and profit to the lessor has been covered.
The rent for the later years of the lease is nominal, so that after the early

high rents have been paid the trader is in possession of the right to use the plant for the rest of the lease at much less than its true value. He can assign this lease for a premium which is not subject to tax and can lease back the asset for continuing use in his business. Alternatively, he may be able to acquire the asset from the original lessor and then sell it for a capital sum and lease it back.
The remedy proposed in Clause 16 is to charge to tax any capital sums received by a trader in those circumstances up to the amount of any tax relief that he has had for payments for use of the asset in his business. The limit of the charge is either the amount of the payments qualifying for tax relief or the capital sum received, whichever is the less. In effect, this is comparable to a balancing charge which withdraws any capital allowances which prove to have been excessive when plant and machinery are sold.
Clause 17 applies to plant and machinery and other assets, excluding land owned by a trader or person carrying on a profession, sold or leased by him to another person and leased back for use in the trade. In those circumstances the trader obtains a tax-free receipt for the sale of the asset or the granting of a lease and in the first few years of the lease-back he can pay an excessive rent under the sublease sufficient to repay the premium with interest. The payments under the lease would ordinarily be deductible by the trader in computing his profits for tax purposes. The recipient, however, will not effectively bear tax on the payments if he is a dealer because he can set against them the diminution in value of the lease which forms part of his stock in trade. The result is that the Revenue loses tax. Once the initial period of excessive rents is over the process can begin again, with the trader receiving a further non-taxable premium or capital sum.
The remedy proposed under Clause 17 is to limit the deduction which a trader can have for payments for leased assets used in his business up to an amount which might reasonably be charged on a commercial basis as a uniform rent for the asset. The effect of this provision will be that there will no longer be a


tax profit in paying excessive and noncommercial rents over a short period leading up to the receipt of a tax-free capital sum. Schedule 7 includes various definitions and points of detail relating to Clauses 16 and 17.

Mr. Mitchison: Can the hon. Gentleman give us the estimates, which, no doubt, the Treasury has made, of the effect of the concessions of the tax avoidance provisions in Part II?

Mr. Green: I must tell the hon. and learned Gentleman quite frankly that it is very difficult to make what I may call a quotable estimate of this, because although this is a clearly attractive device, and, in theory, can be used very widely indeed, it is very difficult to know to what real extent it would be in practice, even if it were not checked. I think I can tell him that the sum at risk, potentially at risk, in theory at risk, runs to several hundreds of millions of pounds.
That is a very theoretical figure, but for sure it is a serious loss of revenue which we think will be stopped. If I can give the hon. and learned Gentleman any better figure I will willingly try to do so. I know that he will appreciate that, not knowing how wide in practice it may run, it is very difficult now to give him a figure which would stand up later.
Clause 18 deals with land and applies not only to traders but to others deriving an income from land or using land in the production of taxable income. The cases covered are those in which land or an interest in land owned by a trader, and so on, is subsequently transferred to another person and leased back to the trader for use in his trade. The Clause applies to all cases in which payments of rent or corresponding payments under an agreement qualify for tax relief. The Clause should not affect normal commercial lease-back transactions. It should, however, deal with devices such as that in which a trader who owns his business premises leases them for a long lease to a dealing concern for a premium which is not taxable and then leases them back, paying in the first few years an excessive rent which, in effect, repays the premium plus interest and profit.
This rent is deductible in computing the trader's profits for tax purposes, but although it is a trading receipt of the property dealer little tax is payable because he can set against it the fall in value of the lease which is part of his stock-in-trade. After the end of the period during which the excessive rent is payable the lease is of little value to the lessor and, by one means or another, the trader is at this stage in a position to repeat the process.
Clause 18, therefore, limits the deduction for Income Tax purposes for payments of rent under a lease-back to a commercial rent for the property. This is defined as the rent which might be expected to be paid under a lease of the land negotiated in the open market at the time when the lease was, in fact, created and subject to its terms, except rent, being a lease under which rent is payable annually, and the rent payable for any year is not less than the rent payable for any previous year. This provision will leave exposed to challenge any lease under which the rent is squeezed into the first few years of the lease. It will not affect genuine cases in which uniform rents or increasing rents are paid.

Mr. Mitchison: I am sorry to interrupt the hon. Gentleman again, but these matters appear to be very important. He mentioned a quotable figure—perhaps an unprintable one—of hundreds of millions of pounds. Is this the same lot of hundreds of millions of pounds, or is there another lot of hundreds of millions of pounds about this?

Mr. Green: No. The three Clauses, 16, 17 and 18, taken together.
I come now to Clause 19, which imposes liability to Income Tax and Profits Tax on companies doing mutual business. There may possibly be some doubt about what mutual business is, and I cannot do better than quote the Royal Commission on the Taxation of Profits and Income, which says:
There must be a common fund. All the contributors to that fund…must be entitled to participate in any resulting surplus, and no one may be entitled to participate in the surplus who is not a contributor to the common fund. Given those conditions, the surpluses are not taxable.
The reference is paragraph 588.
The propriety of continuing to exempt the profits of mutual trading for tax has been reviewed from time to time. In 1932, the Raeburn Committee took the view that the general principle that no taxable profit emerges from mutual trading should not apply where the trading body was a legal entity separate from its members. The Finance Act, 1933, imposed liability on cooperative societies, and also attempted, unsuccessfully, as the courts later held, to establish the general proposition that, if persons engaged in mutual trade through the medium of a corporation formed for the purpose, any trading surplus retained by the corporation should be treated as a taxable profit.
The Royal Commission, which reported in 1955, approved the proposal that surpluses of bodies corporate should be taxed, as the defective legislation intended them to be. My right hon. Friend decided to propose this legislation this year because a recent decision of the House of Lords gave publicity to the possibilities of avoidance inherent in the present position.
The Clause does not apply to all mutual trading, but only to mutual trading wilt or through a body corporate. It will not affect ordinary co-operative societies, which have been liable to tax since 1933, nor will it affect the provision by a social club to members of amenities such as food and drink, since these activities do not normally constitute trading. The bodies chiefly affected will be societies transacting mutual assurance.
In practice, the tax liability on mutual life insurance is unlikely to be significantly altered by the legislation. Their present basis of assessment, namely, on investment income less expenses, is likely to continue to apply. But mutual insurance other than life assurance will become liable to Income Tax and Profits Tax. It is estimated that the yield will be of the order of £5 million a year.
Clause 20 alters the present arrangements for making distribution payments on imports of goods containing sugar, and for reclaiming them on exports of sugar composite goods. The existing arrangements are operating to discourage exports and to provide an unnecessary subsidy to imports. The effect of the Sugar Act, 1956, is that

exporters pay the world price for the sugar used in the manufacture of their products. While the world price was below the internal price this enabled exporters to offer competitive prices, but recently the position has been reversed and our exporters have found themselves in a poor competitive position on foreign markets.
Clause 20 will enable the Minister of Agriculture to determine that distribution payments should not be reclaimed on sugar used in the production of exported composite goods. Thus, the export manufacturer will obtain his sugar at the United Kingdom internal price when this is below the world price, and, in general, this is comparable with the situation in countries with which our manufacturers are in competition.
At the same time, Clause 20 will empower the Minister of Agriculture to suspend distribution payments on such imported sugar composite goods as he may determine. At present, foreign manufacturers often obtain their sugar at prices comparable with the United Kingdom internal price, and distribution payments have the effect of further reducing their costs. The Clause will enable arrangements to be made to stop this unnecessary form of import subsidy.
Clause 21 exempts employment contracts from Stamp Duty. As my right hon. Friend the Chancellor of the Exchequer explained in his Budget Speech, this Clause springs from the Contracts of Employment Act of last year, under which an employer is required to give to each of his employees a written statement of the main terms of his employment. These statements, if they set out all, or substantially all, the terms of the employment, as they ordinarily would, and if they are signed by the employer, would be liable to Stamp Duty.
The duty would normally be only 6d., but it is clearly very much better that they should not be liable at all, otherwise there might be a good deal of confusion because some of these statements would be liable to Stamp Duty and others would not. In any event, clearly it is not proper to tax this form of contract. Statements under the Contracts of Employment Act could not be easily distinguishes from ordinary service agreements, and the Clause accordingly exempts all these documents. The Clause


will come into effect on 6th July, which is the date on which the Contracts of Employment Act comes into effect.
Clause 22 applies certain provisions of existing national debt legislation to United Kingdom Government securities held on the Bank of Ireland's register in Dublin. The purpose of the Clause is to bring the arrangements for dealing with United Kingdom stocks in Dublin into line with those for the rest of the National Debt. The necessary modifications to present legislation are listed in Schedule 8.
Clause 23 gives the Treasury authority to pay sums from the Consolidated Fund to trustee savings banks for the management of their Government stock departments. The proposed payments, which will be based on the amount of Government stocks and bonds held by the banks, will be comparable in character with the payments already made to the Bank of England, the Bank of Ireland and the Post Office for national debt management services.

Mr. Donald Wade: These are Exchequer payments to the trustee savings banks for managing Government stocks. As the hon. Member is aware, the range of permissible trustee investments has been greatly extended in recent years and may include equities. Are the trustee savings banks still limited to Government stocks and, if this is so, are the Exchequer payments made to trustee savings banks for managing Government stock only?

Mr. Green: Yes. The Exchequer payment will be for Government stock only.
Before I conclude, I should like to mention one addition which we shall be asking the House to make to the Bill. In Committee, we propose to introduce a new Clause correcting a flaw in last year's Case VIII legislation, which dealt with the taxation of rents and other income from property in the United Kingdom. We have been advised that as they stand the Case VIII provisions do not take account of apportionments of rents payable for a period overlapping the date of sale of a property.
These apportionments between vendor and purchaser have been taken into account for tax purposes in the past, and contracts for the sale of land are norm-

ally drawn up on that assumption. We intend, therefore, to amend the Case VIII provisions so that these apportionments, and apportionments of outgoings such as head rents made in the same circumstances, will be duly taken into account in computing liability to tax under Case VIII.
I hope that this explanation of what the Bill contains has not been unduly long and that it will be of assistance to the House both in today's debate and in preparing for the Committee stage.

4.17 p.m.

Mr. John Diamond: The Financial Secretary to the Treasury said at the start of his speech that the task which he had was perhaps not glamorous, and at the end of it he said that he hoped that it had been valuable. We can assure him that what he said has been very valuable. A good deal of what he said was quite unexceptionable; nobody could possibly disagree with him. If I may say so, I thought that his description of Clauses 12 and 13—he said that Clause 12 provided for rates of charge of Income Tax for 1964–65 and that Clause 13 provided for rates of Surtax for 1963–64—was a statement to which the whole House would agree without difficulty.
The Government will not be surprised if I look upon this matter and the Second Reading of the Bill from a slightly different angle and perhaps with a different set of values. I should like to pay attention not only to the Clauses themselves—the detail of the Clauses can be discussed in Committee—but also to what is behind the Finance Bill, to try to relate it to the Budget and to extract the essential quality of Part I and the essential quality of Part II. I hope to go on, as this is the only occasion on which one can properly debate it, to draw attention to some of the things which have been omitted from the Bill and which might have well been included in it.
The Bill stems from a Budget which did virtually one thing and one thing only—introduce additional taxation of £100 million on drink and tobacco. I have therefore given careful thought to what possibly were the justifications for and the relevance of doing this. The more I have thought about it the more mystified I have become. In his speech the Chancellor properly dealt with all


the major problems and in his proposals he solved none of them.
There is a problem of regional unemployment. I find it difficult to see how the Budget solves the problem of where the next job is to come for the unemployed worker leaning against a lamp-post on the North-East Coast and smoking his pipe—although he may draw considerable satisfaction both from his pipe and from the knowledge that he is contributing extra amounts to the Exchequer. I find it difficult to see how this £100 million affects our exports, which are so vital, or how it helps with our expansion programme—because, as we all know, the expansion programme is well behind the N.E.D.C. target in relation to the stage which we should have reached at this point in the five-year plan.
I should be wrong to say that this £100 million has no relevance to an incomes policy, because it puts up the cost of living by 1 per cent. and will stimulate a whole series of wage claims. But it has no other effect.
The final problem, and perhaps the most urgent of all, and the darkest of all, is that of the balance of payments. The hon. Gentleman did not touch on that. It cannot be alleged by the Government that they are putting the tax on tobacco to stop tobacco coming in and saving imports that way, because they are calculating on the whole amount of the additional duty being paid. They are making the assumption that one increases it by, say, 10 per cent. and one automatically gets 10 per cent. more coming in.

The Chancellor of the Exchequer (Mr. Reginald Maudling): indicated dissent.

Mr. Diamond: That is as I understood the figures. Perhaps the right hon. Gentleman will explain it later.
This can have only the very slightest and minutest marginal effect on the difficulties that we are all anticipating round about the autumn in relation to the balance of payments. At the moment, we seem to have a strong position in sterling, mainly because we are relying on the strength of the outer sterling countries—on the additional reserves in Australia and so on. Is the Chancellor intending to rely on those exclusively when the squeeze comes?
We tried hard, during the Budget debates, to get out of the Chancellor and the Financial Secretary what proposals they had. When I challenged the Financial Secretary, he said that his right hon. Friend had the regulator to use. When the Chancellor of the Exchequer referred to it himself outside this House—I think that I am reporting him correctly—he said, quite properly, that it would be wrong at this point of time, when one was dealing with a Budget and a Finance Bill and when one could make whatever alterations one wanted to make in the House with the consent of the House, not to do whatever one wanted to do now, and it would be wrong to rely on putting right later by the regulator something which one now knew wanted doing. Therefore, it was not in his mind to use the regulator.
Moreover, we know that if the right hon. Gentleman had to use the regulator he has mortgaged half of it already. The use of it can provide a maximum of £200 million—10 per cent. across the board. In this Finance Bill half of that is used up immediately. So if the right hon. Gentleman has to take action, he is faced with the situation that he must either put a second increase on beer and tobacco, which is unthinkable, or he must limit himself to a modest £100 million and a modest use of the regulator. None of these things has been adequately explained to us. Many of us regard this as the most difficult view in prospect and the most difficult matter to deal with.
As the Chancellor of the Exchequer has provided for £100 million exclusively from drink and tobacco, and as this provision had no relevance whatsoever to all the major issues, it is not surprising that his Budget is being called an irrelevant one, and it is not surprising, therefore, that the Finance Bill does very little to help the situation.

Sir Alexander Spearman: On the subject of the relevance of the Chancellor's measures, if they get rid of some excess demand, surely the hon. Gentleman must agree that that means more competition. Is he saying that conditions of more competition will do nothing to keep down prices?

Mr. Diamond: First, I do not accept the hon. Gentleman's logic. Secondly,


if the hon. Gentleman will allow me to continue he will find that I shall be much more critical of the Chancellor's proposals in relation to the £100 million. If I can destroy the argument behind the £100 million, then I have no need to answer the hon. Gentleman's question, even if I do agree with it.
The Chancellor went on to say that the £100 million was not something that one could calculate exactly and that it must be a matter of judgment. He actually said:
It cannot be a matter of exact calculation."—[OFFICIAL REPORT, 14th April, 1964; Vol. 693, c. 268.]
However, I think that the Chancellor went on to do some very exact calculation, so precise that he got himself into the difficulty of trying to use figures which were well within the margin of error of Budgets and estimates generally. If one attempts to do that, one must surely be claiming superhuman powers.
It appears to me that the Chancellor does not follow my argument about the elementary statistical error into which he has got himself. Last year's Budget showed that the estimates were £163 million out above the line and £209 million out below the line. The Chancelor is now saying that he can control the situation to the extent of £100 million, two-thirds or one-half of the mistake that the estimates demonstrated. If the right hon. Gentleman is not satisfied about that in respect of one year, I have looked up the figures for 10 years, and the 10-year average shows that above the line the estimates were proved wrong on average by £170 million and below the line on average by £160 million.
It is not open to the Chancellor to claim that with that margin of error in the figures he can be so precise as to say that exactly £100 million is needed. If, therefore, one is dealing with a figure which is so minute that one cannot possibly claim from past experience that it has any effect on our situation, I do not think that one can allege that this is a sensible way of dealing with the matter, and I do not suppose that it can be objected to if people say not only that the Chancellor is irrelevant but that he is utterly unreal.
Irrelevant and unreal though the Chancellor may be, the Bill is revealing. It falls neatly into two parts and reveals the character of Conservative philosophy in what I might call its fin de siècle phase. Part I reveals the aspect of Tory philosophy to which one is accustomed, the desire always to put a disproportionately heavy burden on the shoulders of the poorer section of the community. Part II reveals the other basic element in it, the reverence for capital and the fruits of capital, even though the result is to favour those who receive the product of the nation's resources and penalise those who earn it.
Let me try to justify both those allegations. Part I—the Financial Secretary dealt with this extremely quickly and slightly and did not go into the philosophy of it—has the object of raising £100 million exclusively from tobacco and drink. I do not want to enter into the argument of direct versus indirect taxation, because I do not believe that this point has relevance to the argument. It has relevance to the argument of appropriate or inappropriate burden—disproportionate burden.
One wants to know why the Chancellor chose exclusively these two items to raise the whole of the £100 million. Even supposing that he was satisfied that he had to raise another £100 million, it could not have been because of immediacy, which is what he alleged, because Purchase Tax would be equally immediate. Moreover, Purchase Tax, is, or was, socially adjusted, as I might describe it. Although it is an indirect tax, it is not a straight poll tax in the sense that the basic necessities bore the lowest rates and luxuries the highest rates of tax. Two years ago the lower rates were increased and the higher rates reduced. What was to prevent the Chancellor, if he so desired, from raising the additional revenue by putting back the highest rates to where they were? That would have been equally immediate and would have produced a good deal of the revenue which he was looking for.
Why has the right hon. Gentleman looked exclusively to tobacco and drink, which is indirect taxation, and turned his gaze away from direct taxation completely? Why could he not have looked at taxation on companies' profits? As


has been pointed out by my right hon. Friend the Member for Battersea, North (Mr. Jay), tax on companies' profits has fallen by £270 million since 1952–53. If the Chancellor was looking for a modest £100 million, he could have taken one-third only of the fall which has occurred in the tax from those profits and reinstated it.
Has the Chancellor considered the effect on the individual of the increase in the tobacco and drink? I dare say that the Chancellor has looked at the document entitled "Economic Trends", of February, 1964, which sets out very helpfully the proportion of indirect and direct tax paid on incomes of various groups of families. If one looks at that document one gets a good idea of the effect on different families of increasing a tax of this kind. The average family, that is to say, two adults and two children, with an income of between £1,750 and £2,000 a year—those who are reasonably comfortably off—pays 1·8 per cent. of its spendable income in tobacco tax. The same sized family with an income of between £550 and £650, that is, between £11 and £13 a week, pays 5½ per cent. of its spendable income on tobacco tax—three times as much as a proportion of its spendable income as is paid by the well-to-do family.
If I were to talk about old-age pensioners, there would be an objection to that, so I use an unloaded phrase, two adults, with an income of between £4 and £11 a week. They spend between 6 per cent. and 7 per cent. of their spendable income on tobacco tax. That is a fantastically high proportion. More than 1s. 3d. in the £ of every £ that they spend goes in the form of tobacco tax. A couple with an income of between £2,500 and £3,000 a year spend only 1½ per cent. of their spendable income on this tax. The question I address to the Chancellor, therefore, is why does he pick on the one thing that bears hardest on the poorest? Why did he not look at Purchase Tax where the figures, as "Economic Trends" shows, are spread much more evenly and equitably, and where the percentage on different scales is much more the same?
Part I of the Bill achieves nothing in terms of an incomes policy; nothing in

terms of regional employment policy; and nothing in terms of national progress. It merely reveals the Chancellor's desire to have a final "dig" at the worker. 'That is Part I.

Mr. William Clark: Nonsense.

Mr. Diamond: The hon. Gentleman will no doubt have an opportunity later to explain why that is nonsense. I have addressed to the House a series of points and arguments. No doubt at a later stage the hon. Gentleman will destroy them one by one seriatim.
I come to Part II. This is the part which reveals the basic Tory philosophy of the sanctity of capital, so sacred that what comes from the sweat of the brow is taxed, while what falls in the lap from capital sources is untouched. Perhaps the House more easily recognises Part II as a part which deals with anti-avoidance measures. Let me, therefore, try to reconcile those two statements about Part II.
Those mho have been in the House for some time have had the misfortune, which I recognise fully, of hearing the hon. Member for Gloucester making speech after speech with regard to the need for a capital gains tax, and pointing out the moral which arose on Clause after Clause, that if there was a proper capital gains tax it would not be necessary to devote Clause after Clause, year after year, to the problem of anti-avoidance, for the simple reason that essentially the major way of making tax fortunes out of the revenue is to convert income into capital. It arises because we have a structure under which what is income is taxed, and what is capital is not taxed. If, therefore, a person is in receipt of income and he can convert that into capital, he turns from paying tax into avoiding tax.

Mr. Maudling:: But surely that would be true only if the hon. Gentleman was proposing that capital should be taxed at the same rate as income? If it were taxed at a lower rate, there would still be the incentive to move from one to the other.

Mr. Diamond: When the right hon. Gentleman brought in a speculative gains tax he brought it in at the same rate. The right hon. Gentleman has


dealt with a very tiny part of the field, indeed that part which the Government and the Revenue properly regard as income in any event, as gains which were arrived at because one sought to make a profit. As it is extended, so one brings in other sources of capital gains, and it may be that there is a case in the extreme detail for certain capital gains being dealt with at a different rate. This does not affect the general issue at all, because the reason for bringing in these anti-avoidance Clauses is that there is a system under which part escapes tax, while part bears tax.
What are all these Clauses about? The Financial Secretary has explained them. He explained that there may be a series of transactions under which in one case money is paid and allowed against profits, allowed against tax, while in the other it is received as a capital item, and does not bear tax. If there were a sensible and proper capital gains tax, none of these problems would arise. Year after year we have these anti-avoidance measures. A few years ago, under Lord Amory's Chancellorship, we had 12 or 13 in one Bill alone. All those were anti-avoidance measures, the need for which would not have arisen if we had had a sensible capital gains tax.
I do not think that we can leave Clauses 16, 17, and 18 as simply as that. The Chancellor has said that these are serious forms of tax avoidance. The Financial Secretary was unable to give us an idea of the effect of these on future Budgets. Could not we be told how long this device has been made use of, and how much revenue has been lost up to now? That must surely be capable of some calculation. It must have come to the attention of the Revenue.

Mr. Green: I know that the hon. Gentleman would not want to be unfair, or to make a non-existent point. My difficulty in giving an estimate is that I do not want to produce a figure which is, in fact, a guess, because I do not think that that would be of service either to the hon. Gentleman or to the House. I said that potentially, and in theory, the loss could run into hundreds of millions of pounds, but it would depend entirely on what happened in practice.

Mr. Diamond: I am grateful to the hon. Gentleman. He said that before,

and I heard him the first time. That is not what I asked.
I asked the hon. Gentleman to tell the House the basis for the Chancellor's statement that this is a serious form of tax avoidance. This provision has been brought in because, presumably, this form of tax avoidance has been practised. The simple question is: as far as the Revenue is aware, for how long has it been practised, and how much revenue has been lost? I am not asking the hon. Gentleman to look into the future. I am asking him to read the book, as we say, not to crystal gaze. How much has been lost?

Mr. Green: I understand the point, and I do not want to dodge a question of that kind. The hon. Gentleman's professional experience will tell him that this is very difficult to determine here and now. Many of these cases are not properly determinable except by the passage of a certain amount of time. To attempt a figure now would be bound to mislead, and I must ask the hon. Gentleman not to ask me to mislead him.

Mr. Diamond: That is the longest circumlocution for "I do not know" that I have ever heard. If the hon. Gentleman does not know, let him say that he does not know. We are not talking about estimates. We are talking about the past.
The Inland Revenue has proposed these changes to the Chancellor because tax has been avoided under the very methods in these three Clauses. It has been avoided to the extent that the Chancellor, with the responsibility that rests on him, has said that this is a serious form of tax avoidance. The Chancellor does not make statements like that based on nothing. We are asking what it was based on. Was it based on a hunch, on a belief, or on knowledge that there were cases? If so, how much and for how long? If the hon. Gentleman cannot answer, we can draw our own conclusions.
I cannot leave it even there, because we know from what the Financial Secretary has been good enough to say that this is a very serious form of tax avoidance and one which could be practised in the future to the extent of hundreds of millions of pounds. This is not the only kind of tax avoidance


that one conies across. Year after year one hears of new methods having been discovered. I particularly draw attention to the deliberate policy of Her Majesty's Government of giving safe custody to every person who thinks up a new tax dodge. Let me explain why.
Both the right hon. Gentleman and his hon. Friend the Financial Secretary are looking extremely confused. I am sorry that they have not been into this matter earlier. However, it is never too late to mend. The essence of the economics of tax avoidance is that it is worth one's while entering into the scheme provided one has a reasonably full run on one's particular scheme. If, therefore, one starts a scheme with the full knowledge that the Revenue will allow one to carry it to fruition, no matter how many such schemes come to their attention, no matter how many times they alter the law as to the future, safe custody is given to everybody who has got a scheme or has a scheme in mind. All that people need to know is that it is the practice of the Government never to stop a scheme in midstream or at the start of it. In all these Clauses we have the same formula, that any scheme which was entered into prior to Budget day is sacrosanct.
Having regard to the allegations that are frequently made, and having regard also to the Conservative Party's bible, the publications of Aims of Industry, and the allegations which are made therein, let me make clear what I am not—I repeat "not"—advocating. I am not advocating retrospective legislation. What I am saying to the Chancellor is that there is no reason to go the whole hog and say that schemes which have been entered into are perfectly all right for all time. The Chancellor should go much further. He has taken powers under the regulator. He should take similar powers so that he could come before the House with an affirmative Resolution which would alter the detailed provisions of any particular anti-avoidance Clause so as to bring it up to date then and there, and to take effect for the future from the time from which it is altered.
There is no earthly reason why he should not do that and let it be known to everybody who practises in this field that if one wants to bring in a tax

avoidance device, one is running the risk that the moment it comes to the notice of the authorities, the Chancellor will, by affirmative Resolution of the House of Commons, stop it from that point on. That will do more in discouraging initiative with regard to tax dodging than any of the provisions which the right hon. Gentleman has got in his Finance Bill.
Although some little time has gone, I wanted to delay the House a little longer on the question of capital gains tax. The heed for it has not been fully appreciated. The Chancellor and the Financial Secretary, who have been good enough to sit here and listen to me, do not appear to have recognised it themselves. I have frequently drawn attention to the fact that so far as personal tax is concerned, only people who pay on P.A.Y.E. pay their full whack. There are so many other methods of avoiding tax which are open to people who have substantial incomes. It is because this is not fully appreciated that I want to draw attention to another example which came to the notice of the House recently.
I refer to the Ferranti case, where one is reinforced by a fully detailed report of the Public Accounts Committee and one, therefore, knows the facts. It transpires that this company turned its income into capital, turned its profits into capital bonuses, to the extent of £3·2 million over a short period of years—10 years or so. It paid a dividend on its shares of 6 per cent., but the amount that was earned on ordinary shares and not paid in the three relevant years—I mean the relevant years of the P.A.C. inquiry—was respectively: 1959, 84 per cent.; 1960, 166 per cent.; 1961, 129 per cent.
These were all the dividends earned on the ordinaries after making full provision for preference shares and everything. These were not declared as dividends and, therefore, made subject to Surtax. These were converted into capital and later on turned into cash. In this case, therefore, a neat little sum of £3·2 million went to virtually a family of three people, escaping Surtax completely.
I should have thought that the £5 million profit which was made on the Bloodhound contract was sufficient in


itself. It was good enough, or, as those of us on this side of the House would prefer to say, it was bad enough. At all events, it was enough. The company did not need to have the assistance of the Government to enable it to go further and convert profits into capital gains in terms of capital bonuses and so escape Surtax. I hope that the Government are now aware, from this case at close quarters, of the effect of omitting to have a proper capital gains tax, enabling people in receipt of substantial income and controlling substantial income to avoid paying Surtax which, presumably, the Chancellor of the Exchequer expects people to pay.
What came out in this case is the interesting question of contributions to political funds, to which I refer because one is dealing with the Finance Bill and, therefore, one is dealing with the question of allowances, for tax purposes, for subscriptions given to political parties. I make no point as to whether Ferranti's contribute to the Labour Party, the Liberal Party or the Conservative Party. I really do not know. All I know, from a Question put to the Minister of Aviation, is that apparently Ferranti's contribute to Aims of Industry.
If we are to believe a pamphlet which was recently circulated, the hon. and learned Member for Northwich (Sir J. Foster), who is a very learned and knowledgeable Member in these matters, has given it as his view that under appropriate and limited conditions, such a payment can be a proper charge against Income Tax. In short, the taxpayer is paying for half the contribution by the company to Aims of Industry. Some of My hon. Friends may think that that is going a bit far. The Government think that it does not go far enough.
On the Ferranti contract, when they came to deal with the question of overheads and found there was a payment to Aims of Industry I put down a Question and asked the Minister of Aviation whether the item was struck out as an expense, and the answer was "No", that it was too small to strike out as an expense. Therefore, the whole of the item goes into the contract price for these Bloodhound missiles. Therefore, not only are we as taxpayers paying the £5 mil-

lion profit, but we are paying the whole of the contribution by this company to Aims of Industry so that Aims of Industry can play the independent part that it plays in our political life. I am asking the Chancellor to look into that case, too.
I have no objection—I am sure that nobody has any objection—to anybody making a payment to a political party. It is a question of disclosure and of proper treatment. It is a question of paying it out of one's own pocket and not out of somebody else's pocket. I am sure that Mr. de Ferranti is a sincere believer in his political party, as, no doubt, is his brother, who sits on the benches opposite. I imagine that we are indebted to him for the advertisement:
Conservatives give you better standard of living. Don't chuck it away.
We shall never get out of our difficulties until we have a thorough-going capital gains tax. What we have at the moment is a speculative gains tax, so called because what it produces is entirely a matter of speculation. We have tried again and again to find out what this speculative gains tax has produced. Not only have we been put off, but we have been put off in the most arrant and misleading manner that I have ever heard in the House.

Mr. Green: Nonsense.

Mr. Diamond: I hear what the hon. Gentleman says. Perhaps he will be good enough to listen to the statements made by his right hon. Friends. I refer, first, to the statement of the Leader of the House, when he was Chancellor of the Exchequer, on 9th April, 1962. Referring to this matter and the question of yield, he said:
In 1962–63, there will be no yield of tax under Case VII "—
which is what we are talking about—
As far as the yield thereafter is concerned, it is quite impractical to estimate it. The Inland Revenue has no statistical information on which to base an estimate."—[OFFICIAL REPORT, 9th April, 1962; Vol. 657, c. 983.]
What comes after 1962–63, even the Chancellor will agree, is 1963–64. We have come to the end of 1963–64, and the Chancellor has produced this document, the Financial Statement. In the Financial Statement, there are two columns, one for 1963–64 showing what has happened to the outturn, and one


for 1964–65 showing the estimate. On page 20, it is divided into Income Tax, Surtax, Death Duties, Stamp Duties, Profits Tax, and so on. I do not know under which heading the speculative gains tax comes, but it comes under one or other of those headings.
The question we ask it: how much came in under that heading in 1963–64, and how much is budgeted for in 1964–65? Those are simple matters of fact. The answers must be there. The Inland Revenue must know. The tax has either brought in nothing or something. If it has brought in something, the figure is there.
I turn now to an equally serious, if not more serious, aspect of the way we were utterly misled on all this. The Chief Secretary to the Treasury and Paymaster-General—with a title like that, he should be regarded as a responsible individual who knows what he is a talking about—said, during the Budget debate on 20th April this year, in response to questions pressed on him by my right hon. Friend the Member for Battersea, North, by my hon. Friend the Member for Sowerby (Mr. Houghton) and others:
In the nature of things, no yield would accrue to it as far as Stock Exchange transactions were concerned for six months, and, as far as land transactions were concerned, for three years" OFFICIAL REPORT, 20th April, 1964; Vol. 693, c. 899.]
First, the right hon. Gentleman said that no yield would accrue, as far as Stock Exchange transactions were concerned, for six months. This is not the period during which yield accrues. It is the period after which yield does not accrue, precisely the opposite. Next, he said that, for land transactions, the period was three years. But this is not the period during which yield accrues. It can accrue during three minutes, three seconds, three days, or three weeks, but after three years it does not accrue—precisely the opposite. The Chief Secretary was trying to delude us into believing that the reason why the Government were not giving us the figures was that there were no assessments and that no transactions had taken place which were a proper subject for this tax.
Clearly, that was misleading us in the grossest possible way. It is absolutely a contradiction of the facts put

forward to support the refusal of the Chancellor of the Exchequer and the Financial Secretary to give us the information which we want. We want it because we believe that this speculative gains tax produces nothing, or next to nothing. We believe that it is a lot of "my eye and Tommy Martin", to put it in simple terms.

Sir Douglas Glover: Betty—get the facts right.

Mr. Diamond: I am grateful for the knowledge that the hon. Gentleman is not only listening to me, but is alert.
Therefore, unless we know what the figures are, we shall be compelled to conclude as our speculation leads us to conclude, that this tax was put in merely to mislead us and it does not touch the problem at all. It does not touch the problem of capital gains and it produces nothing of any value.
Summarising my comment on the Bill, I put it in this way. Part I is an exercise in social injustice, and Part II is an act of worship at the shrine of capitalism.

Mr. W. Clark: The hon. Gentleman refers to Part I as an act of social injustice. Will not he agree that indirect taxation today, even after the last Budget, is taking less of the gross national product than it was taking when his own party was in power?

Mr. Diamond: The hon. Gentleman is asking me a very complicated question of economics.

Mr. Clark:: What is the answer? Does not the hon. Gentleman know the percentages?

Mr. Diamond: Yes. It has gone down by 0·2 per cent. or something like that—0·7 per cent., in fact. I am aware of the percentages. This kind of information the Financial Secretary is able to produce, somehow or other. He is able to give most complicated and detailed information. Even so, I think that the Chief Secretary got it wrong again on this matter and said that the National Health and National Insurance contributions were no part of direct taxation, whereas, of course, we know from this publication that they are so described and included.
The answer to the hon. Gentleman is quite simple. I have tried to give him the figures to show the effect of these proposals on ordinary men and women, how are they affected in their income, and how their budget is affected. I have tried to demonstrate that the simple answer, which we always allege, but which right hon. and hon. Members opposite are too obtuse to accept, is that the effect is to put a heavy burden on narrow shoulders instead of spreading the burden according to the width of the shoulder. We look upon it in these simple human terms. I have tried to make the point as clear as I can. I have given the figures, which have been prepared by the Central Statistical Office, in support of what I say. I repeat, therefore, that Part I of the Bill is merely an exercise in social injustice.
I could go on making suggestions as to the extent to which the Bill fails to meet the needs of the situation, but there would not be enough time left. I ask the Chancellor to give more thought to the need to help the nation forward, to give more thought to the need for exports, to give much more thought to the question of an incomes policy and to realise that we shall never get a satisfactory attitude of mind so long as wage earners know that any restraint on their part is not matched in any sense by restraint on the part of the profit maker or profit distributor. It is not matched in any way at all, and there has been no attempt by the Chancellor to bring in or even to consider any kind of legislation which would help in that problem.
To refer to the Ferranti case again for a moment, the wages there were such that they could have been increased 800 per cent. and the firm would still have made a profit on the contract. Are we to tell the A.E.U. boys there, as they are, that they should not ask for more than 3½ per cent. or 4 per cent. in full knowledge of the figures for wages over those five years which show that they could have had 800 per cent. of their wages and still not prevented the firm making a profit, and that the only effect would have been to take the money out of the pockets of three individuals and spread it among a large number of wage earners? This is not what I am suggesting. I am just pointing out that this is the situation which is left open because

the Chancellor takes no steps whatever to think of anything in the way of an equalising tax or something of that kind.
The Financial Secretary tells us that he would be glad of ideas. He tells us that the Chancellor is all ears. So were President Johnson's beagles, and we know what happened to them. I do not know what we are supposed to do with the Chancellor—hold him up and shake him to see whether we can get any new, useful and relevant ideas out of him.
What is needed is an entirely new look, one based on principles of social justice, a fair sharing of the burden and an encouragement to those who earn. I hope that it will not be long before my hon. Friend the Member for Cardiff, South-East (Mr. Callaghan) stands at that Box and converts the general principles which I have enunciated into firm proposals. The nation awaits next year's words, and, if I may quote T. S. Eliot with acknowledgment to The Times, "Next year's words await another voice."

5.0 p.m.

Mr. Nicholas Ridley: The hon. Member for Gloucester (Mr. Diamond) covered a very great deal of ground. I do not propose to take up everything that he said. In particular, I do not intend to take up the question of capital gains because there is not time. He complained of the number of anti-evasion Clauses which have been put in past Finance Bills, but he did not admit, which is true, that if there were a capital gains tax there would need to be many more anti-evasion Clauses. I do not believe that the matter is as simple as the hon. Member made out, or that a capital gains tax would make much existing anti-evasion legislation unnecessary.
I will take up a number of the points which the hon. Member mentioned, but first I should like to say that I am disappointed that my right hon. Friend has not introduced in this Finance Bill an extension of betting taxation. It is unfair that there should be a tax on some aspects of betting, such as greyhound racing and football pools, whereas on many other aspects there is no tax at all. I know that this is a very complicated subject, but I hope


that my right hon. Friend will have another look at it and consider it much more on the basis of taxing turnover than on taxing profits. A very large amount of money must be turned over in betting, and a tax of 1 or 2 per cent. might well make a very big contribution to the Revenue without discouraging or penalising the punters.
In every other respect, I welcome the Budget and the Finance Bill. Right hon. and hon. Members opposite have called the Budget very dull. The hon. Member for Gloucester talked about it being "irrelevant and unreal". I suppose that the Budget is dull from the Opposition's point of view. It is always dull when, on the whole, things are going pretty well and we do not have to do very much to change them. There is nothing revolutionary about the Budget, but revolutions are necessary only when things are going very badly and it is necessary to turn them upside down.
This is true of a company which is making good progress and earning money. If it is doing well, its accounts would probably appear to be rather dull. One just has a quick look through the accounts and says, "This company is all right. We need not bother with it." Good, satisfactory, solid progress often is dull, but I think that we would rather have it so. The attendance on both sides of the Hose today makes it clear that neither the country nor its representatives in the House are alarmed or worried by the economic situation.
I have an eloquent tribute to that which I should like to quote:
In fact, the economy of Britain has since January, 1963, been enjoying something of a boom, and these predictions of economic collapse have not been fulfilled.
That eloquent tribute comes from the hon. Member for Wednesbury (Mr. Stonehouse), who is usually not a supporter of the Government. He perhaps thought that it would not be overheard if he said it in Paris, as he did, last Christmas.
The main criticisms of the Opposition seem to fall into two categories. The first is that the increase in taxation should be made in direct and not indirect taxation. This raises the whole question of an incomes policy. The second broad group of criticisms is that the Budget will not help to make industry more competitive and will not help

the export position and the balance of payments. It is to those criticisms, and particularly the second, that I wish to address myself.
I recognise that there is a fundamental difference between the two sides of the House about whether more taxation should be taken from indirect or direct taxes. My hon. Friend the Member for Nottingham, South (Mr. W. Clark) made a very pertinent intervention in the speech of the hon. Member for Gloucester. All I need say about his theoretical assumption of what the average family spends on tobacco and alcohol is that these are not necessities. One can opt out of paying the tax on tobacco, spirits and drink if one wishes.
There is only one other point that I wish to make on the question of indirect and direct taxation. I think that we should reduce tax on work, effort, earning and enterprise to the greatest extent we can. Hon. Members opposite wish to see the removal of the earnings rule in the pensions schemes. I must confess that I do, too. To penalise a man for extra effort by making him pay tax on his earnings is wrong. It seems to me inconsistent that we should have both this pressure for the abolition of the earnings rile and criticism that we should increase the level of direct taxation in the Budget. It seems to me that that does not tie up.
When one comes to an incomes policy, hon. Members opposite seem to assume that there is a sort of running war in which dividends and profits are constantly overtaking the level of wages. They start by fomenting the assumption that wages are rapidly losing ground as a share of the national cake. I must remind the House of the figures. Since the war, in real terms, dividends have increased by 2 per cent. and wages by 78 per cent. Those were the figures last year, and I do not expect that they are greatly different now. They do not bear out the general assumption that there has been a galloping increase in profits and dividends to the detriment of wages. Indeed, it seems to me that the figures of 2 per cent. and 78 per cent. show the reverse.
Hon. Members opposite argue from that invalid assumption that all that is necessary to achieve an incomes policy is to curb dividends and profits and


then, in an enlightened mood, all wage earners will say, "Yes, we see that the system is fair. We will not press our wage claim." Whatever the merits of curbing higher profits, earnings, salaries and capital gains, I do not believe, and I suggest to hon. Members opposite that they should stop believing, that if punitive legislation were introduced against capital gains, profits and Surtax payers we would get co-operation and there would be an absence of inflationary pressure on the wages front. It was demonstrated that this was not true when Sir Stafford Cripps and the late Mr. Gaitskell were Chancellors of the Exchequer.
Whatever the social merits of the case—and I am not arguing about the merits—to lead the country to believe that an attack on higher incomes from envy and almost from malice will lead to restraint in wage demands is a futile way of pursuing an incomes policy. Whether it be Surtax payers, company directors, dividend drawers or wage earners, whoever finds that his position in the economy is such that he can force up his level of earnings, there will be pressure for it, and to think that a sort of quid pro quo can be achieved is, I am sure, wrong.
This was illustrated by the hon. Member for Southwark (Mr. Gunter) in his speech during the Budget debate. He admitted in response to an intervention from my right hon. and learned Friend the leader of the House that during the time of the pay pause profits were falling. If I remember correctly, they fell by 4 per cent. during the last six months of the pay pause year. Despite the fact that profits were falling by 4 per cent., the hon. Member for Southwark said that that had no effect and was not what people wanted. What was wrong was the "attitude" of the Government, who were not taking sufficiently punitive action against profits. Although the hard fact was that profits were falling, according to the hon. Member for Southwark, that would not satisfy the wage earner and punitive measures needed to be taken before he would co-operate. This proves my point probably more than anything else.
What we are searching for in an incomes policy is a device whereby, without punitive attacks upon any section

of the population, we can achieve a cooperative attitude amongst all and a degree of forbearance. This will be bred not from envy and malice, but only from a desire to share out equally a larger cake.
I should like to talk not so much about the distribution of rewards, but how we can get more from industry, from which ultimately we all derive our living, either directly or indirectly. The competitiveness and advanceness of our industrial processes are all that we have from which to make our living. Most people would agree that we have not been doing too badly. Our exports have been increasing and we are holding our own—in fact, edging forward very well in the present world situation. There are, however, certain weaknesses in management and I think that all faults in industry are ultimately traceable to management.
The first of those faults, and one which is not sufficiently stressed, is weakness in design. Industrial design must not only be efficient and work. Wherever possible, it must be attractive and it must have features which are aesthetically pleasant, which look nice and which attract the customer. Most important of all, it must be economic. I am certain that a serious weakness in British design is that we have not been prepared to reduce the quantity of material to the correct amount for incorporation in design.
The second most important factor is research and development. British industry has been rather slow to respond, and much more needs to be done to improve our research and to increase its quantity. If, however, it is suggested that companies should be taxed much more heavily and that the Bill does not contain sufficiently heavy company taxation, those are proposals that would make it more difficult for industry to employ better designers and to pay them more, and to employ better research workers and spend more on research and development, at the very time when these are our weak links. Not all firms have enormous profits from which to pay. The vast number of average firms have a difficult job to balance their budget and pay their fair share of tax. To increase that burden of tax would be bound to reduce their desire to invest in design and research.
It is worth mentioning that the decline and fall of the Byzantine empire was attributed by nearly every historian who has studied it to the fact that its design, research and inventiveness was not up to the standard of that of its competitors. It might interest hon. Members opposite to know that in the Byzantine empire, the whole of industrial direction came from the State and private enterprise was not allowed.
The third important item is the weakness of control in industry. There is a sort of general feeling of tolerance. Industrial discipline has not always been as strong as it should be. We should not have to continue to tolerate the abuses which exist on both sides—for example, the abuses of the expense account or of a company's sporting property. At the same time, however, there are the abuses of labour. The limitation of apprenticeships is unforgivable at a time when we need more skilled labour. There are restrictions on the manning of machines, demarcation disputes and a general feeling that industry is one happy family and not disciplined. We have lost something of the industrial discipline which is necessary to make our industry really compete with other countries.
How can we improve this situation? How, through our taxation or other policies, can we do something to make it even better than it is? I repeat that my criticisms are marginal rather than fundamental. The party opposite must not always take the side of the employee. I have tried, as have many in my party, to recognise weaknesses on both sides. Nothing could be worse for our two main parties than to divide themselves into the employers' party and the employees' party. Constant carping at management and constant criticism of industry as a whole, trying to make out that every business is a sort of Ferranti and up to tricks of that sort, has undermined the confidence of many of our very good industrial leaders in themselves.
If hon. Members opposite are always to support wage claims whether they are right or wrong, always to support restrictive practices whether they are right or wrong and never to stiffen the hands of the employers, we will find it difficult to get rid of the faults on both sides. There

is no encouragement in the policy of the Labour Party to get a greater and more fruitful use of labour. I should like to see much more freedom given to industry, much less nagging and much more help to try to solve its problems.
One of the biggest problems is certainly that of shift work. If we are not to waste our resources, our expensive machines and plant must be used for more hours during the week. The figures, I believe, are roughly that in Germany 55 per cent. of workers are on shift work, whereas in this country the figure is only 14 pet. cent. I may be slightly out of date with these figures, but they are of the right order. This illustrates what an enormous problem there is in converting people to being prepared, I hope for extra reward, to accept an interruption of their life to help to run our plant full time. In a lot of businesses, the cost of having the plant is much greater than the cost of manning it. Clearly, one way to bring down our prices and to increase efficiency is shift work.
I have been talking mainly about how we can improve the existing factors within industry. Obviously, there are the bigger things which the Government have tackled with great courage in helping new industries to expand and moving resources 10 them from declining industry. During this five-year Parliament, the Opposition have fought tooth and nail against the redistribution of our resources and the modernisation of industry. Every plan that Dr. Beeching has put forward to release men and resources from the railways has been attacked from the benches opposite. The coal modernisation plan, perhaps one of the most successful and courageous plans to be carried forward, was opposed by the party opposite in no uncertain terms. Whether it is a question of the aircraft industry, shipyard modernisation or any other industry which is trying to bring itself down to size, we always seem to have opposition. Planning is easy when the plan is to expand, but when it is one of contraction it raises social and political difficulties. Nevertheless, any responsible political party must tackle those difficulties or it will not succeed.
I should like to see much more progress—and this is where I criticise my right hon. Friend the Chancellor of the Exchequer—towards making the change


from a declining industry to an up-and-coming industry easier for the people who work in it.
I would like to see further progress made with redundancy pay, and I blame the Government for not having brought in this Measure this Session. I should like to see much more being done towards developing retraining facilities and here, I am afraid, I must blame the trade unions for not co-operating in the matter. I would like to see much more done in the whole field of industrial training. The passing of the industrial Training Act meant a great step forward, but there is much more to be done. It is perhaps interesting to make the comparison that in the Common Market all expenditure made by a national Government on retraining, on moving workers from one part of the country to another, on redundancy payments and on all moving expenses is recoverable from the European Economic Commission itself. So important do they regard it that they have distributed the national funds centrally in order to make sure that a stimulus is given to this.
Finally, I would like to come to the question of planning. We are being told that, in a sense, the Conservative Party has been converted to planning because it has embraced the recommendations of the National Economic Development Council. If that is so, and it probably is, then there are two forms of planning. There is the N.E.D.C. form, which to my mind means entirely forecasting the future, trying to see what will happen if we make certain assumptions, trying to publicise economic facts and figures and trying to get a model on which we can try out economic experiments for the future.
The other sort of planning has as one of its essentials the backing up of the decisions of the planners by some form of control or enforcement machinery, and this is what I would call interfering in the economy when it does not fit the national plan. Of course, this is the difference between the two sorts of planning advocated in the House. We on this side of the House see virtue in trying to look ahead and in trying to see what would happen if certain assumptions are made, but we are not prepared to force the economy like a parcel that

will not go into the letter box—force it through and not worry what shape it comes out the other side.
To quote a hypothetical example. Supposing the national planning body decides that a certain quantity of cement will be needed at some stage in the future, what is going to happen if the cement makers take a different view? Are they going to be forced to produce that greater quantity, including investing in more plant, more factories and a very large capital outlay? They may take a different view and decide that less cement is needed. This would be defined by hon. Gentlemen opposite as a case where an industry has fallen down on the job and has to be taken over by the State.
It would seem to me that the best parallel that one can cite is the steel industry, which has had central planning and which has been forced to accept the shape which the planners thought it would need. They forced it, through the Steel Board, to produce 30 million tons of steel capacity, and for many years the steel demand ran at about 20 million to 20½ million tons. The most glaring example of State centralised control in the country has got the production of steel 50 per cent. wrong. This has had all sorts of side effects and economic distortions which have been absolutely fatal.
The point that I make is that it would be perfectly all right to say to the steel industry or the cement industry, "We think you will need so many million tons in 10 years' time". But it is a very different matter if we are going to force them into that shape. Presumably the threat behind Socialist policy is that if they will not do as they are told they are classified as falling down on the job and ripe for nationalisation.
I am not complaining particularly about shareholders. Companies and shareholders have lost badly through this process. I am talking about waste of national resources. We cannot afford to squander the resources of this nation in accordance with the terms of Whitehall planners. Therefore, I think that the sort of remedies which the hon. Member for Gloucester had vaguely in mind as he hovered over the field, were


not really practical. The hon. Gentleman concentrated on attacking hon. Members on this side of the House. When one tried to discover what he would do, every avenue which one followed led one nowhere, and the party opposite would obviously leave the country far worse off.

5.26 p.m.

Mr. George Wigg: I rarely intervene in these debates, and it is my intention to make a non-controversial speech, but having listened to the hon. Member for Cirencester and Tewkesbury (Mr. Ridley), I must contribute a little to the debate which may, perhaps, be a little contentious.
The hon. Gentleman talked about the party on this side of the House being opposed to the Beeching plan. Perhaps I might tell the hon. Gentleman what happened in Dudley, about the Beeching plan. We are at the heart of the area where the Industrial Revolution started and are left with all sorts of problems which are really national probems. They are in essence, hangovers from the events and chaos of the last century. Some years ago it was decided to close one of our railways, and we looked at the matter on a non-party basis. The suggestion was put forward that before any railways or stations were closed, or facilities withdrawn, we ought to look at the transport needs not only of Dudley, but of the West Midlands as a whole. This seemed to be an essentially rational point of view. It was, as I have said, adopted by the Dudley Council on a non-party basis.
The suggestion was put to the Minister of Transport in writing. We met him and put the case to him. I raised the matter in the House and we got absolutely nowhere. We also had a meeting at the instance of the much more important City of Birmingham in order to examine the possibility of having such a transport survey. But to no avail. We were turned down at every stage. Then, after a lapse of two years, the Minister of Transport agreed to the survey. Now we are to have such a survey at a cost of £¼ million.
The Labour Party believes in planning and the ascertainment of facts as a prelude to planning. It believes in trying, by a plan, to meet these facts

and then in a democratic way to put the plan into effect. To talk as the hon. Gentleman does, as if we on this side of the House want to use the instrument of nationalisation, is a failure on his part to recognise one simple fact. In the kind of society in which we live there will be a plan anyway. I often think that we are caught up in an exercise in semantics, and that our differences are more about words than we think. When I read what happens in the United States, I feel that the Americans are more socialistically-minded than we are and yet, because they use different words from those we do, they do not mind.
The principle of acting in the public good operates to a much greater extent there than here. There is certainly a curtailment of the activities of what is called "naked capitalism". The argument is not whether there is to be a plan or not. There will be a plan all right. The question is: who is to make the plan and in whose interest is the plan to he drawn up? That is what the argument is about.
I am using the occasion this afternoon to plead for an approach which is very dear to my heart, because I believe that it is along those lines that the solution of the difficulty lies. We cannot look at society and then suppress from our picture the black spots we do not like and enlarge the white spots that we do like. We cannot ignore the overall picture. We must face the facts. Surely we need to reform the procedures of the House so that before we start to argue on the basis of clashes of opinion we take the elementary first step of ascertaining the facts. I have today put down a Motion on the subject in which I am especially interested—defence—to try to get a Defence Committee set up.

Mr. Deputy-Speaker: I am sorry to interrupt the hon. Member, but this is the Second Reading of the Finance Bill.

Mr. Wigg: My inexperience of these debates has led me astray. Having made the point, perhaps the hon. Member for Cirencester and Tewkesbury will agree with me that at least we could spend part of our time upstairs on the discipline of ascertaining the facts. But I will leave that subject, Mr. Deputy-Speaker, before I incur your further wrath.

Captain Walter Elliot: I would agree with the hon. Member for Dudley (Mr. Wigg) that one should consider the transport problems of the West Midlands, or the Midlands, as a whole; but would he agree with me that one should not hold up action in the area of Cornwall or Devon, for instance, while deciding what is needed for the West Midlands?

Mr. Wigg: It would be hypocritical of me to make observations about Cornwall, because I do not know the facts. What I was saying was that we should look at the transport needs of the West Midlands as a whole, not only in the light of today's conditions, but as conditions are likely to develop over the next 10 to 15 years. I regret, because of the Minister, that we have lost so much time in doing so. There is, of course, a case for a Beeching plan after the fullest possible inquiry on a regional basis has been undertaken and the facts and needs of the area ascertained.
It is my purpose, however, to talk about Clause 7, which deals with the subject of betting. The hon. Member for Cirencester and Tewkesbury deplored the absence of a turnover tax on betting, but I thought that that was dealt with quite adequately by the Chancellor of the Exchequer, who said, in his Budget speech, that turnover was not the whole story and that what mattered was not the volume but the actual amount being betted. In other words, while the estimates of betting went into thousands of millions of pounds a year, the Chancellor tended to believe—I think with more accuracy—that the sum was about £100 million or £150 million.
Perhaps I should declare an interest, or lack of interest. I am a member of the Horserace Totalisator Board, for which I receive no salary. I do a great deal of interesting and enjoyable work, and that repays me. I am concerned, therefore, with the possible effect of the Chancellor's proposals on betting legislation as a whole. Let me again try to find a common basis of agreement with the hon. Member for Cirencester and Tewkesbury. He believes that betting should be taxed. So do I, and I do so for three reasons.
First, gambling as a whole has now assumed such proportions that it ought

to be brought under a measure of control, not as a result of direction or invoking the law, but by the use of the fiscal system. Secondly, the growth of betting has reached the point where it is making large incursions into capital investment in the proportion which it takes of buildings, promotion, general communication, Post Office facilities, and so on. The third and most compelling reason is that this would be an act of social justice. If a man or woman has to pay tax on his or her cigarettes, drink, sweets and petrol used for pleasure purposes it is only right and just that betting, which is another form of using one's leisure in what seems to be an appropriate way, should bear its share of the burden.
I took an active and, I hope, useful part in the discussions, on the Floor of the House and in Standing Committee, on the Betting and Gaming Bill and the Betting Levy Bill. I supported and still support the brave purpose of the present Foreign Secretary, when he was Home Secretary. It is a brave Minister who attempts to handle this thorny subject, and he did it with some success. The time may have come when the legislation needs to be reconsidered, but, basically, the right hon. Gentleman scored one major success. He set out to try to remove the stain of illegality from those who wanted to take part in this activity, and he did it because he was rightly concerned about the cumulative effect, on the police and our legal system as a whole, of a wholesale series of evasions of the law.
This had a thoroughly bad effect and there is no doubt that it led to some corruption. The fact that we have reached a state of affairs when that now happens only on a negligible scale is a major achievement which must be placed to the credit of the Government and of the right hon. Gentleman the Foreign Secretary.
The Chancellor of the Exchequer has now come forward with proposals in connection with football betting. I shall not be dogmatic and say that they are bound to fail, but I ask hon. Members to consider what their effect may be. The right hon. Gentleman has decided to impose a tax of 25 per cent. on fixed-odds betting on football. The people who indulge in this activity do


so to the extent of about £50 million a year and the Chancellor hopes to raise about £12 million from which will have to be deducted the concessions made to those engaging in pool betting and on greyhound totalisators and so on.
The bulk of the money, certainly not less than half, is devoted to bets on draws where the odds are about 60 to 1—they vary a little. Pool betting, with which the Chancellor finds himself forced to make comparisons, is also mainly concerned with draws, not exclusively, but about 90 per cent. of the betting on the pools is on draws.
This is not a very profitable part of the business of bookmakers and they give the odds they do because the public wants this sort of bet. I do not speak on this subject with very great experience, because my interest in betting is confined to animals with four legs rather than those with two, but I am reasonably certain that pool betting is concerned much more with numbers chosen at random or possibly related to something superstitious, like birthday dates, days of the month, and so on. The purpose of such betting is to gain a vast sum from a small outlay.
On the other hand, those who bet on fixed odds use their judgment and supposed skill to a much greater extent. After a while, people tend to get fed up with pool betting and the more discerning—as they like to regard themselves—go in for the fixed-odds betting on the coupons. In other words, those who venture into the area which the Chancellor hopes to tax are, by definition, the more discerning and more acute in their judgments and selections than those who indulge in ordinary pool betting. That does not mean that for that reason alone there is any case for taxing the one more than the other.
Under the Chancellor's proposals, the man who would invest 15s. will have to invest about £1, paying about 5s. in tax, or will have to pay 25s. for £1 bet. Merely to suggest that punters who bet on fixed odds will send the extra 5s. in the £ for every bet they make so as to have the privilege of making the bet is also to suggest the answer—they will not do it. The Chancellor may think that there is a more subtle way of dealing with this and may say that, instead of the odds being 60 to 1, there will be

odds of 45 to 1, and that he will get his money in that way.
Pool promoters operate on fairly narrow profit margins. Of every £100 invested, about £28 goes into operating costs and about £70 is sent to the odd one or two who, on average, win, so that the overall profit is about 1 or 2 per cent. The turnover is very great indeed, so that the sums involved on a profit of 1 or 2 per cent. can be very considerable. But, of course, bookmakers lose as well as win.
If the Chancellor is right, and he collects his £12 million, then everything in the garden is lovely. He will have been proved right and he will have redressed the balance which he thinks has unfairly moved against the pools proprietors and I shall have nothing to say. But if I am right, and the discerning punter is not prepared to pay 25s. for every £ better, and not prepared to accept odds of 45 to 1 when he had been getting odds of 60 to 1, what will then happen?
Of the total investment of about £50 million, I estimate that about £25 million goes to three big firms. About £15 million or £16 million goes to William Hill and about £9 million to Ladbroke and Coral, while the other £25 million is scattered over some thousands of bookmakers throughout the country, many operating on a very small basis and some pinching the ideas contained in the coupons of Hill and Ladbroke and some even producing roneoed coupons.
There is a characteristic of bookmaking which should be noted. The Betting Levy Act set up the Betting Levy Board, which is doing its best to struggle with the problems which Parliament has imposed upon it. It was estimated that the Board would collect a levy of £1 million, but it has not done so Of about 9,000 bookmakers, 4,477 produced returns accompanied by an accountant's certificate to show that they had to pay a levy of only £50, which meant that they were making a profit of less than £1,000 a year.
To suggest that of the 9,000 bookmakers nearly 5,000 are earning less than £1,000 a year is absolutely laughable. Nobody in his senses would stay in bookmaking unless, if he did not have a Bentley, his wife had a mink coat. As a slight caricature, that is a reasonable standard for a moderately successful bookmaker. I am certain, however, that the


profit figures that I have quoted should be repudiated as totally false, for profits are much greater and I doubt whether 20 per cent. of the 5,000 who made such a return were telling the truth.
If bookmakers submit returns to a statutory body in the fashion I have quoted, what will their attitude be to this 25 per cent. when they are faced with the opportunities which are created by this legislation? William Hill, Coral and Ladbroke operate on such a large scale that there is no possibility whatever of their evading the law. But what if the punter will not pay the 25s. and will not accept odds of 45 to 1 when he is used to 60 to 1? Around the corner will be another bookmaker, perhaps even one of these gentlemen who, by fading back into the darkened area of illegality, could not only continue to pay the odds of 60 to 1, but avoid paying Income Tax.
But there is something else of even greater importance in this matter. The rate of commission paid for football betting is very high indeed. The average is about 3s. in the £, and 3s. 6d. in the £ is not unusual. As a tribute to the perspicacity of the Scots, the rate of commission in Scotland, I understand, is only 2s. 6d. in the £, because the Scotsman wins much more often than the Englishman and the bookmakers therefore pay only 2s. 6d. in the £ on Scottish business. I do not vouch for that, but that is what I am told.
If the Chancellor, by this Clause, creates a condition where fixed-odds betting on a legal basis disappears, and the runner who collects the money can continue to get his 3s. or 3s. 6d. in the £ because he is operating illegally, and the punter can get 60 to 1 instead of 45 to 1, then, given that situation against the background which operates throughout this industry, I have no shadow of doubt about what will happen. The Chancellor, although I support the object which he is endeavouring to pursue, will have recreated the atmosphere of illegality which the beneficent Acts introduced by the Foreign Secretary, when he was Home Secretary, were designed to prevent.
I hope that the Chancellor is right and that I am wrong, that the provision that he has introduced this year is suc-

cessful and that his successor in his high office can continue the process in what I regard as a rather amusing form of spending one's leisure and, at the same time, making a contribution to the revenue, but I earnestly ask him to consider the possibility that he may not be right. If I am right, we shall not find out until the next football season has been in progress for a few weeks, but it will then become immediately obvious that fixed-odds betting legally will have ended and that a great deal of activity will be going on under the counter, with the results that I have described.
Then we shall have to wait for the next Finance Bill. I ask the Chancellor to be kind enough to contemplate the possbility that I am right and that he is wrong and that the atmosphere of illegality might be recreated. Would it not, therefore, be an excellent thing—I am quite willing to leave the form of the Amendment to him—to redraft Clause 7 in such a way as to make it possible for him to act not as the results of the Clause itself, but under a statutory Order, so that in the first week of September, or, if that is too early, in October, when it has become crystal clear what is happening, he can vary the rates, so that if things have gone wrong they can be put right. That is the burden of what I have to say.
I take my full share of responsibility for the work of the Totalisator Board, of which I am very glad to be a member. It is, as I have said, work which I enjoy, but I should be misleading the House if I did not make it absolutely clear that I speak entirely on my own responsibility. I have not consulted my colleagues and it would be very wrong if it was thought that I had, or that I was speaking on their behalf. But I share with them some of the anxieties about the responsibilities which we have to meet. They are very much tied up with the problems which the Betting and Gaming Act and the Betting Levy Act have partially solved.
I am sure, however, that I speak for them when I say that we hope that very early in the life of the next Government, of whatever political complexion, that Government will look at the working of the Betting and Gaming Act and consider whether it is not necessary to introduce an amending Bill, to consider


how well it has worked, and in what way it can be improved, and to improve it in such way that those people who want to bet and find enjoyment in betting can do so without creating a major social problem and running the risk of breaking the law.
I am absolutely convinced that, quite apart from the long-term effects upon racing—in which I have expressed a very great interest—or the effects on football, or whatever sport betting is concerned with, it would be a wholly retrograde step if the Chancellor in introducing this Clause, not because he is unmindful of this matter, but because he is not fully appraised of the possibilities that might flow from his action, took the country back to the position from which the actions of the present Foreign Secretary released us about five years ago.

5.50 p.m.

Mr. Denys Bullard: I cannot follow the hon. Member for Dudley (Mr. Wigg) into the question of betting and the effects of Clause 7. I want to deal with what at any rate those who are engaged in it believe to be another form of gambling, namely, growing fruit—which is a long way from the subject raised by the hon. Member. I am sure that my right hon. Friend will not be surprised that I should want to take advantage of the debate to raise again the question of the duty on blackcurrant syrup.
I hope that the House will not think that this is too narrow a point, and that it should be raised only in Committee. If there were to be a full opportunity to raise the matter in Committee I would willingly do so, but some of us have found from past experience that if we do not take advantage of the Second Reading debate we are rather stymied at later stages of the Bill. That is why I want to raise the matter now.
In last year's Finance Bill some of us tried to introduce an Amendment to exempt from duty blackcurrant syrup prepared from home-grown blackcurrants. We were not successful in moving our Amendment, and I do not know whether we should be if we tried again this time, but our argument was that this is a special case. This product is derived from home-grown fruit. There is ample evidence that the

price has been depressed because less syrup has been sold since the duty was applied. This has had a serious effect upon the growers. Their return has been reduced by half. This seems to be an unexpected side effect of the Budget of two years ago, which is recognised everywhere as being undesirable. The product is good for people—especially children—to drink, and we thought that there was a very good case for exempting this syrup from tax.
I know that my right hon. Friend has considered this matter very carefully. I had hoped that it would have been mentioned in the Budget, or perhaps in the Finance Bill. I looked anxiously at Clause 8 to see whether the grouping of the various types of duty would permit of some move being made, outside the Budget, to remove this tax. However, it looks very much as though there is only a remote possibility of doing anything before another Budget, and in the meantime this tax may have a very serious effect upon the industry. I am sure that my right hon. Friend would not wish that to happen.
I therefore make an earnest request that this matter should receive further consideration before we finish with the Finance Bill. My hon. Friends and I will certainly try to raise the matter in Committee, but in case we should be thwarted in our endeavour by considerations similar to those which applied last year, I take this opportunity of asking my right hon. Friend to consider the matter again and to do something to help the industry, if he possibly can. I know that he is fully informed on the facts.

5.54 p.m.

Mr. John Rankin: I know that my hon. Friend the Member for Gloucester (Mr. Diamond) has appeared on the Opposition Front Bench on various occasions, but I believe that this is the first occasion on which he has made the opening Opposition speech on a major Bill. I congratulate him on his appearance at the Box today. He has adorned the job that was given to him with the distinction that he carries on all occasions when he speaks, and I hope that in due course we will hear him again from the Box—and not only the Box on this side of the House but, very soon, the Box on the Government side.
I am sorry that the Chancellor has left his place. I would have liked to speak to him, as it were, personally. However, I am certain that the Financial Secretary will convey to him all that I propose to say. In parts of the country there was a considerable amount of support for the Chancellor when he applied taxes in respect of what might be called the sins of the community. We are told that the way of the transgressor is hard, and temperance people, non-smokers, and anti-betters did not deplore the fact that he was making the way harder for that part of the community which indulges in what appeared to other sections of the community to be sins. Some felt that he had become a sort of extreme Presbyterian, and had decided to make this part of his policy, in an endeavour to help the league that is trying to prevent the spread of cancer, by making smoking more expensive.
I want to ask the Financial Secretary if he realises exactly what the Chancellor is doing. A snowballing effect has been created by his decision to put 3s. on the price of a bottle of spirits. From that tax he hoped to receive £17 million in additional revenue.
I want to explore what has happened as a result of the imposition of that tax. In applying it the Chancellor talked about gallons, but when a person purchases spirits he does so in small quantities—in quarts, pints or gills. These are recognised statutory measures. But when an individual goes into a licensed establishment to buy a small quantity of spirits to drink on the spot he receives what is called a measure. As far as I know, that measure has no statutory significance whatsoever. Its quantity is a matter of arbitrary decision on the part of the person who holds the licence, and it relates to his desire to get a certain number of measures from a bottle of spirits.

Mr. Green: I am not an expert on the Weights and Measures Act, but I believe that there is some form of control. I believe that a, person selling retail must at least disclose what he is selling in this way.

Mr. Rankin: That interruption is so vague that I honestly do not know what it means. I hope that when the hon.
Member deals with this matter again he will show a greater perspicacity than he showed in that intervention.
The individual will know what he is getting because he knows what he has asked for. I used the term "spirits". But a customer does not ask for spirits. He asks for whisky, or gin, or whatever type of spirits he wants, and he gets a measure. So far as I know, the measure has no statutory significance. That view is reinforced by the fact that the measure varies in amount throughout the whole of the United Kingdom. I will give three examples of what is signified by a measure, because it is on the shoulders of the licence holder that the burden of collecting the Chancellor's tax has been placed. It is important, in my view, that the Chancellor should know what is happening about the 3s. which he says has been imposed on the purchase price of a bottle of spirits.
My first example is taken from Central London, the second from the golf club of which I am a member and the third from the Smoke Room of the House of Commons. If one goes to a hotel—I am referring particularly to hotels under the Gordon Trust—and asks when in London for a "small one" or a "large one" or, when in Scotland, for a "big yin" or a "wee yin", or a "hauf" or a "gless"—which are all non-statutory terms—one gets a measure, and the volume is decided by the licence holder. If the Financial Secretary intervenes to tell me that there is some control over the size of the measure, or some definition in any Statute of its volume, I hope that he will tell me where that may be found, and what is a measure.
In the Gordon Trust hotels in Central London a licence holder must get 36 measures from the bottle. My golf club expects 26 measures from a bottle of whisky or gin. The House of Commons Kitchen Committee expects to get 32 measures from a bottle of whisky or gin of the same size. The measures must vary in quantity, and therefore it is obvious that a measure of whisky or of spirits is a variable and not a constant factor. The Chancellor says to the hotels, to my golf club and to the Kitchen Committee that every bottle must produce 3s. extra. The financial Secretary is nodding his head in the wrong way—I thought


that he was nodding it in the wrong way, it may be that he was merely shaking it in fear. I do not know.

Mr. Green: No.

Mr. Rankin: No, the hon. Gentle-man was steady. I will leave his head steady.
What happens? I will take the hotels first. If 1d. increase is put on a measure, the hotels will get 3s. on the bottle, that is an easy calculation. But the hotels have put 3d. on each measure and so they are extracting another 9s. from the consumers. The Chancellor said he expected only 3s. "Ask and ye shall receive". Very few people—I hope very few Chancellors—when they ask for 3s., expect 9s., or that 9s. will be put on the price of a bottle, and the consumer robbed as he is being robbed at present by these Trust hotels. I hope that the Chancellor will think on that point—I am glad to see that the right hon. Gentleman has now returned to the Chamber.
In Scotland, where we are more generous-minded, we expect to get only 26 measures from a bottle. But notice the difficulty created by the Chancellor. If he is to be provided with the 3s. he wants, each measure will have to cost 1d. more, plus an unworkable fraction of 1d. That may be the way in which the Chancellor thinks, but it is impossible to carry it out in practice. If 1d. is imposed, we collect only 2s. 2d. more from the bottle and the Chancellor says that he wants 3s. So my golf club suffers. If we put 2d. on each measure, as we have done, we get 4s. 4d., but the Chancellor wants only 3s. So the club members are being exploited to the extent of 1s. 4d. This has created discord in the club, and it is all due to the Chancellor. Does the right hon. Gentle-man realise that he is provoking trouble even in golf clubs, which are respect-able places? Most of the members vote Tory, but they do not like this kind of thing.
In my third example, 32 measures are expected from a bottle. I do not know what the House of Commons Kitchen Committee has done, but if we put on 1d. we get only 2s. 8d. The Kitchen Committee, or the Chancellor, has to make up the deficiency. I wonder

whether the right hon. Gentleman does that. I do not know how the finances are worked, or whether the Chancellor gives anything to help the Kitchen Committee balance its Budget. If 1d. is put on, the Committee is not getting 3s. If 2d. is put on, the Committee gets 5s. 4d. so that hon. Members who patronise the Smoke Room are being exploited and robbed. These are some of the difficulties created by the right hon. Gentleman because of the tax which he has imposed on a bottle of whisky in order to provide himself with £17 million.
He cannot say to the people in London, "If you want cheaper whisky, go to Scotland." That would only add to the cost that they will pay. He cannot say to them, "If you want cheaper whisky than you can get outside. Come to the House of Commons". They would not get in. This discontent is rife, the consumer is being atrociously exploited. I do not know how many other hon. Members have had the same experience, but I am experiencing this discontent in the shape of letters of protest. The right hon. Gentleman has created a spree for licence holders and they are quite happy about this part of the Budget. He has created tremendous resentment among the consumers of small quantities of spirits who frequent licensed premises.
I wonder whether the Chancellor thought how far his imposition would reach. I wonder whether he thought how it would work out; that in those places where they give bigger measures than in others it is impossible to apply the tax which he has imposed because it would involve the use of a fractional coin which does not exist. So the licence holder loses, or has to exploit his customers. I am sure that when he decided to raise more revenue from spirits the right hon. Gentleman did not mean to create a situation where people who used licensed premises would be exploited as viciously as they are now in certain parts of London or that they would be exploited not quite so severely all over the United Kingdom.
I do not know how the tax on beer and wine works out for the consumers. It may be that it operates more fairly than it does for people who drink spirits and who represent a considerable section of the community. I hope that the right


hon. Gentleman will think about what I have said. We still have the Committee stage of this Bill to face and I shall be able to enter into more detail on these matters later on assuming, of course, that I am a member of the Committee which deals with the Budget.

Mr. Houghton: The Committee stage of the Finance Bill will be taken on the Floor of the House.

Mr. Rankin: Well, in that case I shall probably be here. At least I have given the Chancellor warning of my intention and he cannot say that I am springing it on him suddenly. I can assure the right hon. Gentleman that he has to do something about this matter, otherwise there will be repercussions in other spheres where he would not wish that to happen.
I hope that he will approach the problem with a realisation that something which he considered was well-intentioned and would provide him with the revenue which he believed he needed has worked out unjustly for many members of the community. My hon. Friend the Member for Gloucester said that Part I of the Bill was a sample of what he called social injustice, and I agree with him.
I have supported my agreement by giving to the Chancellor examples of what I call the social injustice in the blind operation of this 3s. on the bottle. Whether it will mean a revision of the tax or not, I do not know. I suggest that the important thing that the right hon. Gentleman can do is to inquire into the conduct of those hotels in exploiting something which he himself, I believe, never thought would be exploited in the vicious way that is being done now.

6.15 p.m.

Captain Walter Elliot: I am sure that the hon. Member for Glasgow, Govan (Mr. Rankin) will excuse me if I do not follow him on the particular point which he has covered extremely adequately. There is nothing much that I could add to it. The thinness of the attendance at this debate is a great tribute to the skilfulness of the 1963 Budget of my right hon. Friend the Chancellor of the Exchequer. The fact that last year he could so order things that there is little controversy in the 1964 Budget is a great tribute to his skill.
I want to relate the Budget and the Bill to the incomes policy. The Government have announced massive expansion programmes in almost every field of national endeavour. I am certain that no hon. Member opposite will correct me if I say that the Opposition have agreed with what the Government have announced. We all know that the fulfilment of these tremendous modernisation programmes—and this has been emphasised by my right hon. Friend—depends on the successful implementation of an incomes policy. I will read what my right hon. Friend said during his Budget speech:
I intend to persevere,"—
with an incomes policy—
because in my judgment a solution to this problem would bring economic benefits to our people that would dwarf anything else that we could achieve".—[OFFICIAL REPORT, 14th April, 1964; Vol. 693, c. 264.]
I agree with him. I suppose that the success of an incomes policy can be measured simply in the way it preserves the value of the £. I say quite frankly that, in this, both parties have failed. I believe that it has been an honourable failure.
Both sides have said that we must maintain full employment, and this is the right thing to do. But in doing this we have both failed to maintain the value of the £. We may argue across the Floor of the House which failure has been the worse but that does not alter the failure. Prices have risen too fast.
If one studies economic history, one recognises that a slow rise in prices is not a bad thing. It invariably means that the country is going through a period of prosperity. It is the fast rise that is the trouble, and, in my view, the main evil of inflation is the disproportionate effect on different sections of the community.
Powerful pressure groups—I shall not mention any particular one for I do not want to be controversial about this—are able not only to counteract inflation but to get ahead of it, whereas many other groups cannot, and suffer disproportionately. I ask my right hon. Friend whether he thinks that he is really achieving his ends quickly enough by exhortation only. In my opinion, he is not.
Industry—both unions and employers—seems to me to pay very little, if any, regard to exhortation or appeals on this subject. As soon as business is good enough, agreements are negotiated with very little regard to appeals from the Chancellor or to the national needs. I have talked to a number of heads of industry about this and I am coming to the conclusion that it is unfair to suggest to individual firms or industries that they should consider in their negotiations the national needs. I do not think that it is possible in many ways for them to do it. In any case they do not do it. Always there is an adequate reason in their view for reaching the decision that they do reach.
Then, of course, we have the special cases who, for special reasons, get special treatment. The reason for this seems to me to be that their case is argued by skilful negotiators with long experience who persuade those with whom they are negotiating that theirs is a special case and thus achieve what they want. So if an industry is unable or unwilling to reach an agreement in the national interest as well as its own, it seems to me that it is an inescapable duty of the Government to do what is needed to right the position in the national interest.
I repeat that I think that exhortation is almost useless and may be unfair in a certain sense. One firm or industry might conform, but most will not. In that case, the one that conforms may be at a disadvantage. Therefore, measures must be taken at a national level to right the position. There is nothing new in this. Over the years the Government have been accused of implementing what has come to be known as the "stop-go" policy. This has been done by using certain financial measures, credit restriction and so on.
I think we all agree that it is wrong and unfair to individual industries to bring the whole economy to a standstill just because some individuals will not or cannot act in the national interest. We knew that it is bad for the nation. So, if it is the duty of the Government to take action, if it is unfair and wrong to hit the whole economy, then the only alternative is to be selective. We must pick out individuals or areas of industry which are responsible for upsetting the national applecart, even if inadvertently.
I do not see why budgetary measures should not be used for a Start for these purposes. If we accept that, it is possible to lock at this Bill in a new light. Does it assist the implementation of an incomes policy. I read out what my right hon. Friend said about an incomes policy in the Budget debate.
The need has arisen to cut back for, it seems to me, the same reasons as before—that the nation, or part of the nation, has been paying itself too much. But are the distillers, the wine merchants and the tobacco companies responsible for rising prices? Of course they are not. These particular industries have a very good record of stable prices. Yet they are singled out to take the knock while the real culprits go scot-free and repeat, in the fullness of time, the same old roundabout, the same old depressing rise in prices leading to devaluation of the pound.
It is my criticism of the Budget and this Bill that they fail to hit the right target. I shall not pick out areas of industry or individual firms that I think responsible. We have the N.E.D.C. and the N.I.C. to do that and they are well equipped for the purpose. Nor will I suggest selective measures to rectify the position. I can think of some and other people name others. I believe that the experts at the Treasury can do this job.
There has been one determined effort to get an incomes policy in recent years. That was by my right hon. and learned Friend the present Leader of the House when he was Chancellor. He was severely criticised for this during the Budget debate—unfairly—by the hon. Member for Southwark (Mr. Gunter). My right hon. and learned Friend was only partially successful because he controlled only a certain area of the economy—the area of which he was the direct paymaster. I believe that both sides of industry, both employers and unions, quite irresponsibly failed to follow his lead. I believe that the British organs of publicity—newspapers, television and so forth—were at their worst. They pretended not to understand what he was doing when, in fact, it was crystal clear.
Even so, his policy has given us three priceless years of cost advantage. It has given us a glimpse of the rewards awaiting us if we can get the


policy really working. There was a sequel to his efforts. He lost his job. I do not know all the reasons for that. To a certain extent he seemed to be blamed for the way he put over his incomes policy. But he is back now and doing better than ever.
I believe that there is a lesson here for the Government, and, indeed, for any party. It is, "Do the right thing and let the others reap the inevitable mess if they do the wrong thing". We may get the sack—I do not think we will—but, like my right hon. and learned Friend, we will be back soon and doing better than ever.

6.29 p.m.

Mr. Cyril Bence: The hon. and gallant Member for Carshalton (Captain Elliot) both praised and criticised the Chancellor. But whereas on certain aspects he criticised the Chancellor, I would praise him. The hon. and gallant Gentleman complimented the Chancellor on last year's Budget and pointed out that the Government were developing a massive programme of what almost seems to be national regeneration. But to bring in now a massive programme for regeneration of the nation leads one to presume that the progress of the last 12 years of Conservative Government has been wholly inadequate to the nation's needs. If I have to effect massive repairs to my house in one year, that is evidence to me as a house manager that I have neglected its maintenance in previous years. The massive national programme for the next four years is a reflection of the weakness of our programmes in the last 15 years.

Captain W. Elliot: May I put it slightly differently? It might be said that the programmes and the progress in previous years have laid massive foundations on which these massive future programmes can be built.

Mr. Bence: We are now arguing which came first, the chicken or the egg. Had some of the proposals for 1965–69 been carried out in 1954–58, we might not have experienced some of our balance of payments difficulties and might have been in a far better position to meet the scientific and technological era into which we have been

plunged. One can argue this in a circle, but, in general, we are by this massive programme making up for some of the shortcomings of the Government's policies in the last 12 years.
The hon. and gallant Gentleman said that in this context he thought that both parties had failed. It is arguable that the party which has been in power for 12½ years failed as the party in power and as the Establishment and that the Opposition as an Opposition have failed to carry their ideas through Parliament and force their acceptance upon the Government in power. The hon. and gallant Gentleman knows that with three line Whips on important occasions it is impossible for us to impose our ideas as long as we are in Opposition.

Captain W. Elliot: I put this failure in a very narrow context, namely, in the context of the preservation of the value of the £.

Mr. Bence: We have been in Opposition. In Opposition our responsibility is to examine the Exceutive's proposals, criticise them when we feel we should criticise, and suggest ideas when we think we should. If there is anything for which we can be criticised, it can be only that our opposition was not as vigorous as it might have been. I believe that our opposition and criticism were very vigorous indeed. We have stimulated the Government in 1964 to undertake the massive programme that we have advocated for 14 years.
I am sorry that the hon. and gallant Gentleman expressed his views in the way he did about the national interest. Most of us from our experience may think that most trade unionists or workers in industry and boards of directors are not concerned with the national interest. Many boards of directors are concerned only with the immediate industry in which they are engaged. They are concerned with their own advantage, irrespective of all the other firms around them and of the national interest.
Such an outlook can exist, but I do not think that it is inevitable. In Britain, as well as in any other country, a national outlook can be created in which working people and executives will, co-operating together, consider the national interest. I agree with the Chancellor of the Exchequer in exhorting industrialists and trade unionists


that, in all their actions and demands, they should have regard to the national interest, as well as their own individual or collective interests. If we reasonably pursue our private interests to our own advantage but at the same time keep in mind the national interest, we shall be acting in the best interests of the nation as a whole, as far as human weaknesses permit. Any Chancellor of the Exchequer is obliged to exhort every section of the community to think, especially in the twentieth century, not only of their own interests but of the national interest. He does not ask them to abdicate the pursuit of their own interests. He has said to them, justifiably, "If you do not consider the wider national interest, in the long term you may defeat the best interests of your individual enterprise".
This is the position of Britain in the second half of the twentieth century. Everybody must recognise that we must now earn our living in the world. We hear talk about the slack in our economy. There is no slack in the world today. There is no fat that we can gather from the world without effort. The fat has gone. We lost it in honourable causes. Any Chancellor of the Exchequer is right to exhort the people to think of the future of the nation and their children, to co-operate, and to ensure that their individual group or company interests do not conflict with the nation's general interests.
There are many reasons why industry should do this. Since 1951 Chancellors have paid out £4,000 million of public funds in support of private industry. I am not complaining that the private sector of industry has received this money from Chancellors. The State has taken the taxpayer's money to sustain industry, to foster it and to increase our capacity to produce and export. Therefore, the Chancellor is entitled to ask individual private enterprise companies which receive such support from all sorts of institutions created by the State to think in terms of the economy as a whole.

Captain W. Elliot: I was relating my argument to the Budget and the Finance Bill. We are taking out of the economy over £100 million because we think that the pressure is becoming a little too hot. We are taking it from industries which it cannot be argued are responsible for the price rises.

Mr. Bence: I was coming to that. The Chancellor has been compelled by the needs of the political situation to project a massive programme for the next four years. This is a political decision, a promise of economic action which may restore the Government's fortunes. I am not complaining about that. I expect the Government to do it. They did it in 1954 and in 1958. There is no reason why they should not do it in 1964. Time will tell whether it is accepted by the electorate.
The hon. and gallant Gentleman said that the Chancellor, in easing the pressure in the interests of stability and to relieve the pressure on the £, is taking £100 million of purchasing power out of the economy. The hon. and gallant Gentleman objected that the Chancellor is taking the £100 million out of the economy at the expense of the distillers, the brewers, and the tobacco manufacturers. The hon. and gallant Gentleman said that it should not he at their expense because they had made the best contribution to price stability.
That is the most extraordinary argument I have ever heard. The fact is that the Chancellor is taking £100 million of purchasing power out of the people's pockets. He says, "I ask you to spend £100 million less on consumer goods". I agree with the Chancellor's decision to increase the price of whisky and tobacco and, in some respects, to restrict gambling. Far better that people should spend £100 million a year less on these things. It is well known that British distillers export their wares to every corner of the world. If they get an additional £100 million in foreign currency as a result of that much less whisky being bought in Britain, in the long run it will be more profitable for us because the money saved can be used to buy the latest machine tools, equip our industry and so increase our capacity to manufacture consumer goods for export.
This is not a question of my wishing to punish the distillers. I merely agree that if we are to modernise our industry and continue with large-scale research and technical development, it will be necessary for future Chancellors to take a certain amount of unpleasant action. I would have objected strongly had the Chancellor done anything to frustrate the expansion and development of the


machine tool industry. I have no objection, however, to his attempting to reduce the consumption of alcohol.
Having to a large extent agreed with the right hon. Gentleman's proposals, I must put forward a few complaints, some of which I mentioned last year. I have been disappointed, in the readjustment of taxation, that the Chancellor has not taken this opportunity to remove the tax from gymnasium equipment. The nation is already overcrowded and the facilities which exist for our children to have recreation and take part in sporting activities, particularly in the huge conurbations, are being whittled away. Despite this, there is still a stupid Purchase Tax of 15 per cent. on gymnasium equipment. This totally unjustified levy inhibits the efforts of voluntary associations and increases their expenditure, and I should have thought that the Chancellor could easily have afforded to have abolished the Purchase Tax on gymnasium equipment.
My next complaint is about personal allowances which can be claimed against Income Tax for people who are employed in industry; and this applies to employees generally. If the Chancellor contacts the insurance companies he will find that they agree with the suggestion I am about to make—indeed, some of them say that the provision of the equipment I have in mind should be compulsory. There is a form of shoe on the market called a "Totector". It has a steel toecap and gadgets of this sort help to prevent workers from injuring their feet. Such injuries occur in many ways—from falling pieces of steel and so on—and the wearing of protective footwear helps to reduce the severity of accidents.
Would it not be desirable for work-people to be allowed to buy these things—and this goes for protective clothing of all sorts, including protective headgear, especially for women with long hair—and claim Income Tax allowances for their purchase? I understand that tax reliefs are granted for the purchase of protective clothing to people in the chemical industry. It would not be difficult for a schedule to be drawn up to include protective clothing for industry generally. This clothing is

easily distinguishable and has only an industrial application.
My next complaint has more of a bearing on Scotland than England because the Scots are not as used to commuting long distances to and from work as are the English. In Scotland, industry developed in a different way from England. Factories were established around communities or vice versa, but because of the redistribution of industry and overspill agreements many workers are having to move away from the older townships and, as a result, are having to commute long distances. Imagine a family in which the husband must travel to work and his two sons must also commute 20 or 30 miles to the place where they are taking an apprenticeship. Such a family, living on a relatively small income, must spend a great deal in fares.
I hope that the Chancellor will consider enabling workers to claim Income Tax relief for travelling expenses of this sort. He should remember that we are no longer siting factories with thousands of houses packed tightly around them. With our modern ideas, of siting factories away from townships, it is essential that workers should receive some help in meeting their travelling expenses. I am not dogmatic on this issue. I raise this matter as a result of observing the new towns in my constituency and in other parts of Scotland. I can assure the Chancellor that many thousands of commuters, particularly in Scotland, are having a heavy financial burden placed on them as a result of our modern industrial techniques.
The last appeal I wish to make to the Chancellor is for a relaxation in the present charges for television licences. I often watch television programmes designed especially for the deaf. Having made inquiries, I know that in some cases the annual licence fee creates difficulty for deaf people or families with a deaf child. I wonder whether any deaf people are prevented from enjoying the television programmes designed especially for them because they cannot pay the licence fee? I have not made a close survey of this matter, but it might be practical to consider a scheme for either giving television sets to the deaf or, if that cannot be done, allowing them to receive programmes free of charge;


in other words, not to have to buy licences. To people living on a small fixed income, £4 a year is a large sum. Although only 1s. 6d. a week, it could make the difference between a deaf person enjoying the programmes to the full or otherwise enjoying them with a certain reservation.
The Chancellor is entitled in his Budget to make concessions in investment allowances, taxation and any other sector. Each year we spend more in support of private industry. We are helping to modernise and increase the output of private enterprise. It is only fair, therefore, that the Chancellor should—through the N.E.D.C. and all other such organisations—see that the interests of the nation as a whole—including the stability of our economy and the maintenance of our standard of living—are protected. He should make it clear to private industry that since it is getting more and more assistance from the nation it should make ever-increasing efforts to do better on the nation's behalf.

Notice taken that 40 Members were not present;

House counted, and, 40 Members being present—

6.51 p.m.

Mr. G. R. Mitchison: There is not much that is out of order on the Second Reading of a Finance Bill. Today, we have wandered over various subjects—blackcurrant syrup, the insufficiency of a measure of whisky, described with the eloquence peculiar to my hon. Friend the Member for Glasgow, Govan (Mr. Rankin), and sundry other matters. Perhaps the lack of generality in what was said has been the best comment on the Bill. One always cherishes a hope that, even at the last moment, one may induce the Chancellor of the Exchequer to answer one or two questions that have been put to him all through the Budget debate and, to some extent, today. In that slender hope, I propose to put one or two of them again.
Before I do that, however, I must tell the right hon. Gentleman that though it may be very good Parliamentary practice not oneself to answer questions, but to ask them in turn of the Opposition, it is not very satisfactory as a discharge of the serious responsibilities of the

Chancellor of the Exchequer. After all, we are entitled to know rather more about how the right hon. Gentleman has arrived at £100 million as the proper amount to be taken from the public—I am not for the moment speaking about how he takes it
I have been looking again at the right hon. Gentleman's Budget speech, which I heard, and it seems that the essential point in his background in arriving at that figure was a deficit this year of about £36 million above the line and £894 million overall. For this purpose one has, I think, to take account of the overall figure. On the face of it, £100 million is a somewhat inadequate contribution towards meeting that position, but I am not saying that it is too much or too little. What I want to find out is what led the Chancellor to arrive at it. The Chancellor told us that his decision as to the size of the change must clearly be a matter of judgment and not of exact calculation. It was not only not exact calculation—it was not on any calculation at all. We are forced to the conclusion, unless the right hon. Gentleman can correct it, that this was a simple hit-and-miss judgment; that he knew the amount of the deficiency and had no particular reason for arriving at this figure.
When one listened, as I did with very great interest, to my hon. Friend the Member for Gloucester (Mr. Diamond) pointing out that this was roughly half the usual difference between the Treasury estimate and the actual outturn, one felt even more that the selection of a figure of this order required some justification, but we have never had it throughout the course of these debates. When the right hon. Gentleman has been asked, his only answer has been to ask, "Well, what would you do?". It is not our business to tell him what we would do; it is his business, as Chancellor, to tell us and the country how he has arrived at this particular figure.
That is the more so when one considers the very remarkable way in which he proposes to raise the money. The right hon. Gentleman told us that what he was tring to do was to
…avoid the danger of what the economists call 'overheating' the economy…".—[OFFICIAL REPORT, 14th April, 1964; Vol. 693, c. 267.]


I should have thought that there were very many ways in which the Chancellor could have done that. For instance, a profits tax was suggested by my hon. Friend the Member for Gloucester today. I could suggest a great many more ways, and I am perfectly certain that the Chancellor and the Treasury between them could suggest a good many more.
But in putting on a general tax, even if he needed an immediate one, the right hon. Gentleman chose three particular means, and to me he seems to have selected, for the purpose of raising the revenue, the very things that would create the maximum of social injustice. I cannot see the point of selecting these things rather than having, if he needed it, a general increase. Let him tell us upon what grounds he selected these particular things.
Did he really look round for the best way of soaking the poor? That is exactly what this looks like to me. If we are accused of soaking the rich, surely we may at least reply, "If you want to soak the poor, this is the very best way of doing it." There is every possible disadvantage in doing this as against a general rise of some sort. And the curious and remarkable thing is that, in the very same Bill in which he puts on these increases in selective indirect taxation, he takes power to use the regulator—in a more discriminating way, I agree, but still to use it—and to use it as a last resort if there really is any overheating. It is surely incumbent on the right hon. Gentleman to make up his own mind, with the information he has and that we cannot have, and to tell us quite frankly why this amount has been decided, and why this particular method of imposing taxation has been chosen.
I shall not go into the matter in detail—and there is no need for that. It is perfectly obvious to anyone that whatever we may say about the relative advantages and disadvantages of indirect and direct taxation, these particular taxes will tell to a quite disproportionate extent on the old, on the poor, and on those who are in a very humble way of life. I want to know from the Chancellor the grounds on which he selected these particular items. There is, of course, a health case about tobacco;

I recognise that but, at the same time, one has to recognise that every increase in tobacco duty has had no more than a temporary effect, that the consumption has reverted, and that the yield over the years has not been affected by and large by changes in the amount. The same sort of proportion has been taken.
Those are obvious questions to ask the right hon. Gentleman, but there are other questions which were asked by my hon. Friend today and I put them again in the hope that we may have some answers. In his Budget speech the right hon. Gentleman occupied a great deal Of time in dwelling upon the importance of an incomes policy. Accepting that, I wonder whether he will tell us today why he has done nothing whatever in the Budget and in the Bill to meet what he must know perfectly well is the fundamental difficulty in putting an incomes policy to people who are getting wages taxable under Schedule E. The fundamental difficulty is that they know perfectly well that the people on the other side of the table are getting a large amount of money which is regarded as capital for taxation purposes and which is, in fact, actually income.
Capital gains, until they are dealt with, will remain the principal obstacle as I see it to the co-operation of all people who would otherwise co-operate in an incomes policy. There is no answer to this. If we look at what is happening in the tax avoidance Clauses of the Bill we cannot have a better illustration of what is going on. These arrangements about leasing land and plant and the rest derive from and depend upon an artificial distinction between capital and income. If that distinction were not there, those arrangements would not be there. If there were an efficient tax which caught these capital gains, we would not have to come back year after year and seek these tax avoidance measures.
Would the right hon. Gentleman, for one moment, have had to put tax on beer, wines and tobacco now if he had levied the money before on this kind of thing? We do not suppose that this is new, or that it is new to the right hon. Gentleman, but let him tell us how long this has been going on and what is the Treasury estimate of the amount which


has escaped taxation and which would not have escaped it if these Clauses had been in force earlier. We are concerned about that, and I am perfectly certain, from what the Financial Secretary said in opening the debate, that we would have a figure very considerably in excess of the £100 million which it is proposed to raise by new taxation in the Budget.
We are entitled to complain that the old and the poor are being made to pay for the Government's inability, or lack of courage, to deal with the gains of those who are seeking to avoid taxation which the Schedule E taxpayer has to pay and which the indirect taxpayer also has to pay. When one looks at the Budget in this way one is driven to another conclusion, which is that no Tory Government ever will deal with the people who are making untaxed profits out of capital gains, as they are called.
The Tories have had 12 years to do it. Now, when they put before the country a considerable programme which, of course, ought to have been put years ago and which they are in no position to carry out—a programme to which the Chancellor referred in his Budget Speech—they are still unable to ask for a proper contribution towards that programme from the people who are living far better than they should be as a result of having capital gains which are still untaxed.
The Tory Government have had 12 years to do this. I do not say that for the first year or two one has quite so much to complain about, but after that, year after year, we have had two things going on. First, there has been the sight to everybody in the country of people living uncommonly well on untaxed capital gains which the ordinary man cannot distinguish, and which I cannot distinguish, from income. On the other side of the picture we have had the spectacle of the Government, year after year and in one Budget after another, refusing to take powers to deal with these things properly, and coming before us at last as the gendarmes in the Offenbach chorus, always too late to deal with a device which has been in operation for a considerable time and which, as soon as they deal with it, will be replaced by another. This is incompetence and cowardice. This is the Budget of incompetence and cowardice.

7.6 p.m.

The Chancellor of the Exchequer (Mr. Reginald Maudling): The hon. and learned Member for Kettering (Mr. Mitchison) was a little rough in his concluding remarks, but I will confine myself to answering the points which he and others have made in the debate. I will try to deal with them consecutively and not immediately if that is agreeable to the hon. and learned Member.
It is fair to say that the main basis on which the contents and effect of the Budget and the Finance Bill must be judged is the total amount to be raised in revenue, whether it is adequate or excessive, and the method by which it is to be raised. First, on the content—the total for which I am budgeting—it is fair to say that there has been fairly general agreement with my calculations, or rather with my judgment. Certainly the response abroad has been very good. We have concrete evidence of this in the very heartening strength of sterling and the accretion to reserves since the day of the Budget.
In this country the main doubts expressed by experienced commentators is whether I have increased taxation by enough and whether the Budget will succeed in slowing down the current expansion rate of 6 per cent. to the 4 per cent. which we have in mind. I believe that it is enough. I have reached that judgment by taking into account, first of all, as I explained in my Budget statement, various factors impinging on the growth of demand, private and public consumption, investment, exports, and stock-building which point to expansion at something like the present rapid rate.
If one were purely mathematical in the approach one could say that we should increase revenue enough to reduce expansion by 2 per cent. I thought that that would be too high, for two reasons. First, I said that there were certain natural factors which operated to slow down a boom. There are also straws which one sees in the wind which show what is likely to happen—unfilled vacancies and bank advances, for example. There are also certain natural tendencies to slow clown at certain stages of the business cycle which one would be foolish to ignore, a sort of built-in governor in the


economy. To increase taxation too much would have been a bad check to expansion. I therefore thought it right to fix the figure as I did, as less perhaps when strictly calculated than was necessary but as one which to my mind should be enough.
Last year I thought it wise to err if anything on the side of caution and I reduced taxation by less than many recommended. This year I thought it right to err on the side of boldness and to increase taxation by less than many people thought necessary, knowing that if I was proved wrong it would be possible to do more. Last year, if I had not done enough it would have been possible to do more to stimulate expansion, but that, as we know, was not necessary. Similarly this year if my judgment should be wrong, and I trust and believe it will not be, it will be possible later if necessary to do more. It is better to do it that way rather than to go too far and then to have to retrace one's steps. This seems to me to be the path of common sense in these matters.
As for the methods chosen for raising the revenue, I think that there has been general agreement outside this Chamber that I was right to concentrate on indirect taxation, first, because the purpose must be to check consumption and, as my hon. Friend the Member for Cirencester and Tewkesbury (Mr. Ridley) pointed out, to apply the taxation at the point where the money is spent rather than where it is earned. Secondly, indirect taxation operates rapidly and immediately whereas changes in direct taxation take a considerable time to have any effect.
Given that it was right to increase indirect taxes, I think that again there has been very little argument that it would have been wiser to choose other indirect taxes than I did. I think the general reception of the Budget outside this Chamber has been satisfactory. In a number of quarters the view has been expressed that as I am not in a position this year to reduce taxes by a substantial amount, I should have concentrated more on tax reform.
I think there is a certain fallacy here. In fact, there are not two alternatives because, as the hon. Member for

Sowerby (Mr. Houghton) pointed out last year, many tax reforms which are desirable involve large reductions in the revenue. For example, the assimilation of companies' accounts for Income Tax and Profits Tax purposes, about which we have published a White Paper, would cost £25 million of revenue in the first year. If one wanted, as all Chancellors would like to do, to assimilate Income Tax and Surtax into one single graduated scale, this would involve bringing together the rates of tax on earned and unearned income, and to reduce the tax on investment income to the present level of tax charged on earned income would be very expensive.
It is, therefore, a fallacy to suppose that there are two alternative courses in that if tax cannot be reduced it can be reformed. Last year, in the course of reducing the taxation by a substantial amount, I was able to make some big reforms in the structure of taxation by the abolition of Schedule A for owner-occupiers, by the rationalisation and extension of capital allowances and by introducing the wholly new principle of free depreciation.
In the course of today's debate a number of points have been made. Perhaps I should deal first with one or two particular points. The hon. Member for Dudley (Mr. Wigg) expressed an interesting argument about the tax proposed on fixed odds coupon betting. I did think very much about the danger of driving betting back into illegal channels in the context of betting generally. While I will certainly take account of what the hon. Gentleman has said, I am confident that the danger that he has in mind does not apply in this particular circumstance, for two reasons.
First, the betting shops are in existence, and if people want to put an ordinary bet on a horse race they will continue to go to the betting shops. I do not think they would want to set up an illegal business to promote fixed odds coupon betting. Secondly, coupon betting by its very nature involves the printing of documents and publicity. Having studied this matter carefully and having taken advice from the Customs and Excise, who are wise in these matters, I am confident that there are no dangers of evasion in this case


comparable with the ones that we would have to face if we were to introduce a general betting duty.
My purpose in taxing fixed odds coupon betting was not only to raise the revenue there but to protect the very important revenue from the pools which has been falling considerably. I am confident once again that the total revenue that I shall get from these two forms of betting—pools and fixed odds coupon betting—will be up to the estimates that I put forward in my Budget speech.
One or two points were raised on Purchase Tax. My hon. Friend the Member for King's Lynn (Mr. Bullard) mentioned blackcurrant juice. I know there are strong feelings on this matter. I have looked at it on a number of occasions. But I have always found it impossible to distinguish between particular drinks of this kind in a way which would not undermine the tax on soft drinks generally, which are an important contributor to the Revenue. So I am afraid that I have not been able to meet my hon. Friend's point of view on this matter.
The hon. Member for Glasgow, Govan (Mr. Rankin) made a point about the price of whisky, which I found a little baffling——

Mr. Rankin: Not just whisky.

Mr. Maudling: No, I appreciate that the hon. Member was thinking in terms not only of whisky but of spirits generally, though he mentioned whisky, no doubt for patriotic reasons. The tax on spirits is not levied at so much a bottle but at so much a gallon as it is withdrawn from bond. I am certain of getting my revenue as it is withdrawn from bond. As to the difficulties to which the hon. Gentleman referred, no doubt they will be raised in Committee. So far we have received no complaints on this point at all.

Mr. Rankin: Does the right hon. Gentleman appreciate that I quoted the Chancellor who said that the tax amounted to 3s. a bottle? It was the Chancellor on whom I relied for my figure.

Mr. Maudling: The additional tax which is imposed per gallon is equivalent to 3s. a bottle, just as the additional tax of 6s. 6d. a lb. on leaf tobacco is

equivalent to so much on a packet of cigarettes. It is convenient to the public to know what so much per lb. and so much a gallon mean in other terms. I can only say that we have not received any complaints on this point.
The hon. Member for Dunbartonshire, East (Mr. Bence) raised a number of points which again will be more appropriate in Committee. I must confess that some of them sounded familiar to me, and while I could not immediately remember the arguments against them no doubt I shall recall them because these are matters which we have considered in the past and have found it difficult to meet.
On incomes policy, my hon. Friend the Member for Cirencester and Tewkesbury and my hon. and gallant Friend the Member for Carshalton (Captain W. Elliot) made comments. I am not sure that I agree with my hon. and gallant Friend the Member for Carshalton in his attitude. I certainly agree with him about the remarkable effect upon our competitive position as a result of the policies of my right hon. Friend, my predecessor, which have been shown in the improvement of our exports and the strength of our economy. But I think it is wrong to say simply that exhortation is not enough and then to imply from that that the Government should go forward to some form of compulsion. I do not believe this is practicable.
I think the real reason why an incomes policy must be a matter—I would not say of exhortation, although it is called that—of leadership and precept, is that the alternatives are either statutory control of prices and wages, which I do not believe this country wants or will accept, or Government policies designed to restrain inflation by restraining demand at the cost of growth and expansion. I feel very strongly that, difficult as this problem is and will remain, we must persevere all the time to try to get the acceptance of an agreed incomes policy.

Captain W. Elliot: I agree with what my right hon. Friend says, but would he not agree that the form of compulsion in the past which has induced the stop-go policy has operated over the whole field? I am suggesting that that is wrong


and that it is agreed to be wrong, and therefore the alternative, if it is the Government's job to put forward certain measures, is to be selective.

Mr. Maudling: I agree on the first point that a stop-go policy, as it is called, is unselective. I said that one of the unsatisfactory alternatives to an agreed incomes policy is a return to stop-go, namely, restraining demand at the expense of expansion. I do not agree, though, with the hon. and learned Member for Kettering who said that the main obstacle to agreement on an incomes policy is the absence of a tax on capital gains. I have been engaged in discussions on this matter in N.E.D.C. and other responsible bodies for a long time, and I have not heard this argument advanced. I cannot remember ever hearing it advanced with any seriousness or importance as a reason against the setting up of an incomes policy.
The arguments are normally much more in the field of distribution of national income, between wages and salaries, on the one hand, and profits and dividends on the other. This is a problem of immense complexity because of the difficulty of dealing, in the case of earned incomes, with the exceptional case and the relativity of different incomes; and the difficulty, in the case of profit incomes, of dealing with the point that they must fluctuate and that there must be the maximum disparity between the reward to the efficient firm and the reward to the inefficient firm.

Mr. Wigg: I am sorry not to have asked the right hon. Gentleman to give way a little earlier. In relation to Clause 7 on the betting duty, does the right hon. Gentleman rule out completely the suggestion that I made of taking powers under that Clause and doing it by regulation?

Mr. Maudling: That is an interesting suggestion, but I must rule it out. For one thing, I do not think we shall possibly know what is happening, or whether he and I are right in practice, until many months after the start of the football season. In practice, I do not think it would achieve the result that the hon. Gentleman has in mind.
I turn now to some of the comments made by right hon. and hon. Members opposite on the Bill. First, it is reasonable to point out that, for the second time running, there has been no serious opposition at all to the Finance Bill offered by the Opposition. So far as I know, there has been no vote against any of our proposals. Indeed they have offered no more than a token resistance to what we have put forward.
The hon. Member for Gloucester (Mr. Diamond) asked how the level of taxation on which I had decided could have any relevance to major issues such as exports and expansion. This is a rather strange question. I can think of nothing more relevant to expansion and exports than the level of taxation raised in the Budget. After all, the rate of expansion is bound to be determined by the total demand in the economy, and by no single factor is this influenced more than by the level of taxes settled in the Budget. As for exports, clearly, one of the most important things to do in order to ensure that our balance of payments remains sound is to ensure once again that demand does not rise so high as to deflect goods from the export market to the home market and to suck in more imports.
It is a strange argument that the level of taxation fixed in the Budget is irrelevant to the economy. I shudder to think of any party having power whose Chancellor of the Exchequer really thought that that was so. However, I do not think that it is likely.
The hon. Member for Gloucester asked why I chose alcohol and tobacco. The argument here is fairly simple. There are four main blocks of indirect taxation, alcohol, tobacco, the Purchase Tax and hydrocarbon oils. I thought that the two to select were alcohol and tobacco because they represent consumption expenditure, because they are not necessities. The alternative would have been to put it on the Purchase Tax rather than on tobacco, on the Purchase Tax rather than on alcohol, or on hydrocarbon oils, which, of course, would have the considerable disadvantage of putting up the costs of industry and commerce. If the Opposition would really prefer to put up the Purchase Tax and the oil duty rather than put up the tax on tobacco and alcohol, I hope that they will say


so. Otherwise I do not quite see the point of the question.
The hon. Gentleman then asked, why not increase company Profits Tax more? This is the burden of much of the argument which we have heard from the party opposite, and I think that the answer should be given again. It has already been given, of course. First, an increase in the Profits Tax would have no effect this year because the additional revenue would not start to accrue until next year, and it would take some time to have its full effect. Second, an increase in the Profits Tax would be reflected in a reduction of company savings and would, therefore, not have the same economic effect as an increase of taxation on spending. Third, I could think of nothing which would be more calculated—I think that the argument of the hon. Member for Dunbartonshire, East rather led to this—to discourage investment in industry than to increase the taxation of industrial profits at this time. For all those reasons, T considered that increasing the taxation of company profits would, in the first place, be ineffective for my purpose and, in the second place, would possibly be damaging to the economy.
Both the hon. Member for Gloucester and the hon. and learned Member for Kettering referred to a capital gains tax. I was very interested to hear what both of them said about it. Clearly, they were contemplating a tax on capital gains generally at the same rate at which income is charged to tax, in other words, at the full rate of Income Tax and Surtax. This, of course, is a very large proposal.

Mr. Mitchison: I did not say a word about rate.

Mr. Maudling: But the argument of both the hon. and learned Gentleman and his hon. Friend was that the reason for these avoidance devices to which they referred is that there is a difference between the rate of tax charged on capital and the rate charged on income. What the hon. and learned Gentleman said—I think that I noted his words correctly—was that he could not distinguish capital gains from income.

Mr. Mitchison: This is still not right. The point is that people make money which is not taxed because it is treated

as capital. This is the real substance of the case, and it does not depend upon the rate in the least. One may think that a rate is quite inappropriate for that, although it is a proper rate for Income Tax, or vice versa. The point is that, at present, that money escapes taxation and is used and spent as though it were income.

Mr. Maudling: The arguments of the hon. and learned Gentleman and his hon. Friend led inevitably to the conclusion that capital gains are income and should be taxed at the same rate. Otherwise, their arguments are as meaningless as their words. That is the position in which we are left on this matter.
I was asked to give an answer to two questions. I take, first, the amount involved in the avoidance devices referred to in Clauses 16 to 18. We cannot give an estimate of how much may have been involved. The practice has only just been started and, of course, we acted as soon as the Inland Revenue heard about it. I think that it will be generally accepted on both sides of the House that the Inland Revenue staff are very alert and astute people in these matters and they get on to these things very early in the day. The figures which my hon. Friend the Financial Secretary gave related to what might have happened if this had not been stopped, but I cannot give any figure for the amount involved. I think that it is likely to be very small.

Mr. Houghton: It is not a question of how quickly the Inland Revenue gets on to these things. What matters is how quickly the Government get on to them.

Mr. Maudling: I think that it was a matter of hours between my hearing about it from the Inland Revenue and my authorising the drafting of the Clauses for this purpose in the Finance Bill. I do not think that I could act more quickly than that.
Next, I take the question which the hon. Member for Gloucester asked about the yield of the short-term gains tax. We must have the position quite clear on this. The first year of assessment was 1962–63, and returns have to be made after that year for payment during 1963–64. Of course, in a significant number of cases the tax chargeable for 1962–63 has not yet been settled. There


are many disputes, as there are bound to be, particularly in the case of a new tax. Secondly, a new tax in its first year does not ever yield its full rate or weight of revenue, and the point is—it is complicated to explain, as the hon. Gentleman said—that in 1962–63, while one will get the benefit of transactions in land completed within just under 12 months, one will not get the benefit of transactions in land completed between 12 months and 36 months which one would get in a normal year. The same is equally true, mutatis mutandis, for the six-month period affecting stocks and shares; one would only get in 1962–63 about half a full year's capital gains on transactions concerning stocks and shares. Therefore, in both cases, the actual yield collected under the tax for 1962–63 will not be typical, and it would be substantially less than in a normal year.
There are two other points. First, the tax under this Case is charged not only under Income Tax, but also under Surtax or Profits Tax. The hon. Gentleman said that it came only under one, but it could fall under all three heads. Therefore, particularly in the case of Surtax, it will take longer for one to be sure how much is being collected. Another important point is that, as a result of the introduction of the short-term gains tax, quite a number of gains, so to describe them, will in fact be returned by taxpayers not under the new Case but under one of the old Cases, Case II, I think it was, so one will never know exactly how much money collected as a result of the imposition of the tax was collected under the new Case established by legislation.
For all those reasons, it is plainly not possible to give a figure. I have tried very hard to get the figures and I have gone into great detail with the Inland Revenue, but it is really impossible to give a meaningful figure at this stage as to the amount of revenue collected or likely to be collected for 1962–63, and, even when it is available, it will not give a true picture of the average yield likely in a full year.

Mr. Houghton: In view of the very close interest not only of the House but of the country in the first results of the new tax, is the right hon. Gentleman saying that, although he has some information which he could give, for the reasons he has stated he thinks it would be unsuitable to give the information at his disposal? When we were pressing the Chief Secretary on this matter, he rather suggested that he had no information.
I understand that inspectors of taxes were asked to make a report of assessments made under Case VII of Schedule D. I understand that the figures would not represent conclusive assessments, not subject to appeal and the rest, but we would like to know the gross amount of profit assessed under this new Case in Schedule D. Is it £10 million, £20 million or £100 million?
We would like to know something about a tax authorised by this House, in the outcome of which, initially, I think, we have a very close interest.

Mr. Maudling: As soon as the information is available, we shall give it to the House. We want to do so. But there is no point in giving partial and misleading information. That would do more harm than good. As soon as the figure for the amount assessed for 1962–63 is known, which we think will be towards the end of this year or the beginning of next, it will be made available.
I think that I have dealt with all the questions which have been asked during the debate. I say again that this is not a Bill which has been opposed in its passage so far by the Opposition. I do not think that the arguments which they have advanced against it have been strong in any way. I think that what they have revealed, rather coyly, of what they would do themselves has given us food for much thought and much future material.

Question put and agreed to.

Bill accordingly read a Second time and committed to a Committee of the whole House.

Committee Tomorrow.

AGRICULTURE (CALF SUBSIDIES AND FATSTOCK PAYMENTS)

7.31 p.m.

The Under-Secretary of State for Scotland (Mr. J. A. Stodart): I beg to move,
That the Calf Subsidies (England and Wales and Northern Ireland) (Amendment) Scheme, 1964, a draft of which was laid before this House on 23rd April, be approved.
Would it be convenient if we also took the other two Statutory Instruments on the Order Paper? The two Schemes deal with calves and the Order deals with more mature animals.

Mr. Speaker: It is in order to discuss them together if the House so pleases.

Mr. Stodart: Thank you, Mr. Speaker.
May I start with the two Schemes relating to the calf subsidy, one in Scotland and one in England. I do not think I need dwell on them long, because they are simple. All that the two amendment Schemes do is to give effect to the increase of 10s. in the subsidy for steer calves born on and after 1st January, 1964. As the House will know, this was an item in this year's Annual Review, and I do not think that I need detain hon. Members long with explanations.
There are, however, three points to which I should draw attention. First, the date 1st January has been deliberately chosen to cover all spring-born calves and to benefit the rearer of steer calves of the beef breeds, the great majority of which are born before April. There have been objections on previous occasions when the calf subsidy has been changed in its rate on 1st April. The objection was that it was not sensible to do this in the middle of the spring calving season and that it might put a considerable strain on the honesty of those applying for the subsidy. I hope that we have done better this time.
The second point of note is that the Schemes which we are amending cover calves born only up to and including 29th October this year. In case of misunderstanding, I should repeat, as is stated in the Annual Review White Paper, that the calf subsidy is to be continued for a further three years from

that date. That means that a Motion to approve a new Scheme in draft will be laid before the House in due course.
Thirdly, there is the cost of these increases. For Scotland, this is estimated to be £100,000 in this financial year and £125,000 in a full year. For England and Wales and Northern Ireland, the equivalent figures are £400,000 in this financial year and £625,000 in a full year.

Mr. Roderic Bowen: Would the hon. Gentleman split those figures between England, Wales and Northern Ireland?

Mr. Stodart: I will give that information if I can before I sit down, but I do not think that it is available.
That this production grant has been successful is shown by the fact that since 1953 the number of calves certified in Scotland—and the House will forgive me if I give the Scottish figures first—rose from the vicinity of 250,000 to over 425,000 in 1963, an increase of 70 per cent. In the rest of the United Kingdom, they have gone up from 1¼million in 1953 to 1,843,000 in 1963. Therefore, I think that I may invite the House approve the Schemes which are necessary to authorise the higher subsidy for the calves born within the period covered by the existing Schemes.
I turn to the Fatstock (Guarantee Payments) Order, which was laid before the House on 26th March. I do not pretend that this is as simple in its application as the two Schemes which I have just described. The purpose of the Order is to provide authority for guarantee payments on fatstock to be made for the period which began with the opening of the present fatstock guarantee year on 30th March. It supersedes the existing Order which, after some amendment in 1961, has been the authority for these guarantee payments since March, 1960. The main difference between the existing Order and what we now propose lies in the changes in the guarantee arrangements for sheep and cattle which were announced in the White Paper entitled the Annual Review and Determination of Guarantees for 1964.
The House will no doubt observe that the new Order has separate sections for cattle and sheep and another one for


pigs. The system which was in operation up to the end of March this year worked well enough, but it fell short in one important respect. It did not provide much incentive—and, if I may say so frankly, as a producer, it did not provide enough incentive—to farmers to pay attention to whether the market was being weakened by being over-supplied or was strong because of shortage.
What is now proposed is that the seasonal scale of standard prices for fat cattle and sheep will remain. This was worked out, as in previous years, after the recent Price Review. These prices, which vary according to the seasons, are at their peak about the beginning of April when they reach 184s. 6d. per live cwt. for cattle and 3s. 7¼d. per lb. dressed carcase weight for sheep. The price for cattle reaches its lowest level of 152s. about the beginning of October and lasts throughout that month. The lowest price for sheep, which falls to 3s. 0½d., lasts a good deal longer—from 10th August until 8th November.
I should explain the workings of the standard price in relation to the deficiency payment. The difference between the standard price in any week and the actual price realised in the market will form a nominal rate of deficiency payment. If this difference is more than 27s. per cwt. in the case of cattle, the amount of the deficiency payment will be reduced on a graduated scale. The maximum reduction can run to 12s. 6d. per cwt. If the difference between the standard price and the actual price is less than 23s., an addition to the deficiency will be made, again on a graduated scale, up to a point where producers may receive on average a total return of 8s. above the standard price.
I am certain that the House does not believe that this is a simple scheme. I should like, therefore, to illustrate with what, I think, is a simple example how the new arrangements will work. At one period during the year—in the forty-fifth week, which falls at about the beginning of February—the standard price for cattle is 160s. per live cwt. If, during that forty-fifth week, the average market price turns out to be 135s., there would be a nominal deficiency of 25s., the difference between the two figures. The figure of 25s. falls within what I can

best describe as the no man's land between 27s. and 23s. and, therefore, the deficiency payment would be 25s.
Suppose, however, that the market was weak and the average was only 125s. There would then be a nominal deficiency of 35s. This would carry a reduction of 2s. 8d. from the 35s., so that the payment would be only 32s. 4d. If, on the other hand, there had been what farmers know as a "flying trade" in the market, averaging out at 145s., there would be a deficiency of only 15s. This would win a bonus of 2s. 8d., making 17s. 8d. on to the 145s.
In the case of sheep, the scale of reductions will begin when the deficiency is more than 6d. per lb. dressed carcase weight and it might rise to as much as 4d. If the deficiency is less than 4¼d., there will be a supplement or bonus up to a limit of 1½d. above the standard price and that will be included in the guaranteed payment.
A point arises concerning the marketing of sheep. The Government are wisely anxious to encourage the production of lightweight lambs and, therefore, the first 2d. of any abatement will not apply to lambs of 38 lb. dressed carcase weight and under. A result of this, which is of great interest to Scotland with her vast areas of hill land is that hill farmers whose lambs are light—blackface lambs are light in any event—and who are obliged by circumstances over which they have no control to put their lambs on the market at a time when marketing reaches its peak, namely, in the autumn months, and when, accordingly, reductions in the deficiency payments may be high, will have protection given to them because any reductions of abatements in the deficiency payments will not bite to the same extent.
I come now to the second stage. When the fatstock year ends at the end of March, the average of all market prices will be calculated. The difference between this and the guaranteed price for the year, which is 170s. in the case of cattle, will form the all-over deficiency payment. The weight of all fat cattle which have been certified will be multiplied by this deficiency. If the total of that sum comes to more than what has been paid out in guarantees, a further flat-rate payment will be


paid out on every animal which has been certified.
The only other change of substance in the Order is in the feed formula arrangements for pigs, under which the guaranteed price is related to the cost of a standard feed ration and is subject to adjustment in accordance with changes in the cost of the ration. The present arrangements were made some years ago and since then tremendous strides have been made in achieving a better food conversion rate.
The method now proposed is that for every change of 4d. per cwt. in the price of the ration, the guaranteed prices will vary by 3d. per score deadweight. A change in the basis of this adjustment was also announced in the White Paper and the rewording of the relevant article in the Order permits this change to be put into effect. That the scheme has its complexities, as I said at the outset, I should be the last to deny, but so also—and, in my view, even more so with things that were called rolling averages and stabilising limits for cattle and sheep—had the one which we have recently discontinued.
I do not pretend that this is to be regarded as a magical solution to the difficulties of ensuring an orderly supply of meat to our markets. The new arrangements will, however, make it well worth while for farmers and other producers to study the strength or the weakness of fatstock markets in precisely the same way as it pays a farmer to pick the right week in which to sell his wheat. It will certainly discourage the tendency, which has sometimes appeared, to think that no matter whether the trade be good or bad, the guarantee will bail a farmer out.
The Order is concerned with methods and procedure. The changes involved are acceptable to producers generally and I commend the two Schemes and the Order to the House.

7.47 p.m.

Mr. Timothy Kitson: I wish to refer to two points in the Calf Subsidies Scheme. I should like my right hon. Friend the Minister to draw the attention of his certifying officers to paragraph 5 of Statutory Instrument No. 1364. I know from my own experience and that of many of my

constituents that it is extremely difficult to get calves certified at the age of eight months as suggested in the Scheme. We have encountered the difficulty of having to wait probably until calves have reached about a year before the certifying officer will punch them. This creates difficulties.
Only recently, I have written to my hon. Friend the Joint Parliamentary Secretary to tell him of the case of one of my constituents who, realising the extreme difficulty that he now has of getting the calves certified at the age of eight months, left it until they were about a year old. He applied for certification in January. The certifying officer was due to arrive a month later. Just before he arrived, there was suspected fowl pest, which eventually was confirmed. The certifying officer, quite rightly, did not then appear on the scene for another six weeks.
By that time the calves had broad teeth. The case went to appeal, but it was turned down. I am sure that this sort of thing would not arise if the certifying officers were accepting calves at the suggested time of eight months.
I should also like to refer to the exclusion of Friesians. Everyone will agree that the majority of barley-fed beef are Friesian calves. It is only the fact that the Friesian Society still chooses to call it a dairy breed that keeps Friesian cattle out of the scheme. I consider this to be extremely unfair. The best shorthorns and red polls can still produce a cow which will give eight gallons of milk, which is far more than many Friesians w ill produce, and yet they are eligible. Friesian heifers are producing beef calves in the same way that dual purpose cattle do.
This situation needs to be carefully studied. I know that a number of branches of the National Farmers' Union are now justifiably putting forward resolutions to this effect, and I would have thought that the next time the scheme came before the House we should carefully consider the inclusion of Friesian cattle, because if Friesian calves are required for barley feeding we ought to consider whether Friesians should not become eligible for this subsidy.
I should like to say how grateful I am to my hon. Friend the Member for


Edinburgh, West (Mr. Stodart) for at last explaining the fatstock guarantee payments arrangements. I have tried to explain them on a number of occasions, and I am now a little better equipped, having heard him give a very reasonable explanation. The only problem is that there are few farmers who like to put anything on the market unless they know exactly what they will collect at the end of the day. With his explanation, my hon. Friend has reasonably pointed out that the difference between what they expect to get and what they get is only very small. I am sure that when the farming community gets used to working the new guarantee, it will be satisfied with it. I am certain that the Government are right to ensure that farmers work to the markets. For far too long this need has been ignored, and this Scheme is a step in the right direction.

7.53 p.m.

Mr. Emrys Hughes: I agree with the hon. Member for Richmond, Yorks (Mr. Kitson) that we have had a very lucid explanation from the Under-Secretary. It has been very interesting to see a Scottish Minister instead of an English Minister at this debate on agriculture. We hope that this trend will continue.
There are some matters on which the Under-Secretary might have given us a little more enlightenment. For example, when the Price Review was analysed in the pages of the Scotsman by that newspaper's very able agricultural correspondent it was pointed out that it amounted to an increase of £4½ million over the previous year. This scheme is part of that sum. The figure of £4½ million seemed familiar. Last week, I tried to elicit some facts about the rents paid by Scottish farmers to Scottish landlords. Curiously enough, they amounted to £4½ million. To some extent, at any rate, what is happening is that the taxpayer is assisting the farmer to pay rent.
Both sides of the House generally accept that we want to do our best to ensure a living wage for the farmer and to improve agricultural output, but there is always the lingering feeling in my mind that anything granted to the farmer to improve agriculture too often

finds its way into the pockets of the landlords. I should like the Under-Secretary to tell us what percentage of this money goes into the pockets of the landlords.
There is a great deal of criticism of agricultural policy in Scotland. Although I was not present, I know that the Under-Secretary came in for much criticism at a meeting of the Scottish National Farmers' Union, in my constituency. In the Scottish Farmer the following week he was not exactly regarded as the last word in help to the farmer. Some of the criticism against him has been unjust because it should have been directed against those in the upper circles of the Government who are more responsible for agricultural policy.
The fact remains that there is considerable interest in the fact that both the Secretary of State for Scotland and the Prime Minister are large landlords in Scotland. Naturally, the question is whether any of this subsidy will percolate to rich landlords and landowners who do not require subsidies. The interest arises especially when we hear that the Prime Minister, for example, owns 60,000 acres of land on the borders of Scotland. It is natural to ask to what extent these agricultural payments percolate to large landowners who do not need a subsidy. I do not wish in any way to attack the landlords of Scotland unjustly. It may be that they are on the poverty level.

Mr. Keith Stainton: On a point of order. Is it in order for references of this type to be made?

Mr. Deputy-Speaker (Sir Robert Grimston): I think that they are just on the fringe of order, but I am listening very carefully to what the hon. Member for South Ayrshire (Mr. Emrys Hughes) is saying.

Mr. Hughes: It may be on the borders, but I am talking about the borders geographically as well as in argument.
Perhaps the Under-Secretary would like to make some attempt to say how much in the £ of the calf subsidy ultimately finds its way to the pockets of the large landowners. There is considerable indignation in Ayrshire and other parts of Scotland because rents are going up.


I should like some assurance that the money being paid to farmers will not be paid to landlords and so not help farmers.

Mr. Kitson: indicated dissent.

Mr. Hughes: I am merely putting the grievance which farmers have put to me. I do not know whether the hon. Gentleman is familiar with the Scottish National Farmers' Union.

Mr. Kitson: I am a member of the N.F.U. in England.

Mr. Hughes: I am not dealing with England. I am not dogmatic about England. I would not dogmatise about the hon. Gentleman's constituency. I am trying to elicit information and to satisfy the farmers in my constituency, some of whom say that their rents have gone up by 125 per cent. and that some of the subsidy is going to the landlords.
I have tried to get the figures by questioning the Secretary of State for Scotland and the Under-Secretary, and I have asked for figures of incomes of landlords in the border counties and Ayrshire and Argyllshire in the same way that the English Minister of Agriculture estimates the incomes of farmers. But I cannot get those figures.

Mr. Deputy-Speaker: The hon. Gentleman cannot go into detail about figures. He has been quite entitled to complain that part of these guaranteed payments are going to landlords and not to farmers, but if he gets beyond that point and into detail, as to the amounts, figures, and so on, he is getting out of order.

Mr. Hughes: Thank you, Mr. Deputy-Speaker. I was only trying to elicit information.
I am surely entitled to ask for information before we pass this Order. What percentage, for example, of, say, £250,000 or £400,000 does not go to the farmer at all, but goes to the landlord? I have tried my best to get these figures by question and answer, but as soon as we ask questions of this kind down comes the iron curtain of silence. I should like to know why the Minister is so reticent when discussing the income that the landlord gets from these subsidies.

8.1 p.m.

Mr. Cyril Bence: I want to support my hon. Friend the Member for Central Ayrshire (Mr. Emrys Hughes). He is on a very important point. We are reaching a stage where we are giving considerable support from this House to all branches of industry, including the farmers. I am all in favour of supporting agriculture. The soil is the most important heritage man has, and it is important that we should support the rearing of livestock, and support the farmer in keeping the soil in good heart and fertile, so that we can produce the maximum amount of food, whether it is livestock, vegetables or cereals for consumption.
I support this subsidy so that the person who shall reap the benefit of it shall be the farmer and those who need the product, the housewives and the people in general. But when the State intervenes in this way and gives subsidies for the specific purpose of rearing calves into beef, we must have parallel regulations to ensure that not one penny of these subsidies accrues to the advantage of anyone except the rearer of the calf who produces it into a steer to butcher or put on the market. If any of it passes to dealers, farmers, and landowners who do not perform any particular function in the rearing of the calf, I think that we are misguided in granting these subsidies.
It is shocking that we should pay these subsidies for Scottish beef, some of the finest beef in Europe. The farmer gets a guaranteed price, but he gets no benefit at all out of this subsidy with the guaranteed price. It is the dealer who markets these cattle. I have heard it said that the farmer benefits from the selling of this beef on the continent of Europe; but he does not. The farmer is paid a Support price, a fixed price. It is only when the market is so denuded that the price passes above the guaranteed price that the farmer benefits. When the market price is below the guaranteed price, the person who gets the benefit of this subsidised beef is the French housewife and the British dealer who can perhaps get a better price on the French market. The British farmer is not benefiting at all.
We have an Order here which to all intents and purposes—and both sides of


the House support this purpose—is to help the Scottish farmer so that he can produce good beef for the housewife. We find that the dealer, not the farmer, exploits the rearing of these fine cattle, subsidised by the Scottish taxpayer, and that instead of offering it through butchers' shops to the housewife it goes to Paris, Nice and Cannes, which is where they are getting the benefit.
I should like to make sure that none of these subsidies pass to the dealers and wholesalers who are exporting these carcases of mature cattle to the Continent of Europe.

8.5 p.m.

Mr. William Ross: These Statutory Instruments are very important. I am surprised, in view of the number of letters I have received from the farming community over the last six months—certainly prior to events just a month ago—how little interest there is in the House, particularly by those Members who are supposed to represent agricultural constituencies. The only Scottish Members here are Labour Members, apart from the Minister, whose duty it is to be here. It is also his pleasure and his profit, and he declared in a graceful way, his own interest.
The absence of hon. Members is rather shocking, which, of course, does not surprise me. When we had an agricultural Bill they were not here. Indeed, it may well be that they have already lost heart. In any event, we are not here to discuss the merits or demerits of Scottish Unionist Members, as they like to call themselves, but rather the merits or demerits of these Instruments. Does the hon. Gentleman wish to interrupt, because I will give way if he does?

Mr. Stainton: I was wondering where the hon. Member for Workington (Mr. Peart) happened to be.

Mr. Ross: If the hon. Gentleman is going to consider where all his hon. Friends are, he will spend the rest of the week considering where they are. He will recollect that this Scheme was introduced by the joint Under-Secretary of State for Scotland, and I do not think that it is inappropriate, that being the case, that I should have a word or

two to say on it. I hope that he does not begrudge me this opportunity because it is not often that I weary the House.

Mr. Bence: You never weary the House.

Mr. Ross: What the Government have done is eminently sensible, particularly the change of date, and, of course, there is the additional 10s. for steer cattle. It is noticeable that this Scheme ends on 29th October, so it will be left to the next Government. The hon. Gentleman said that it was to be continued for another three years. He is rather anticipating things. It is the intention of the present Government to continue it for three years, but whether with or without changes I do not know. Was this part of the deal that was made with the farmers? Are the Government committing themselves in relation to future events as well as to this year? I should like a little more information about the further three years, and whether the subsidy is going to be at these various rates. The importance of this to Scotland can be seen in the figures given. I think that the cost in this financial year is to be £500,000. In spite of that, one-fifth will go mainly to Scottish hill farmers—£100,000. It is usually reckoned that Scotland's interest in such matters as these amounts to 11–80ths. This is greater than 11–80ths. Scottish farmers, especially small ones, felt that they were sold down the river by the Government in connection with the M.A.P. grants. We shall probably discuss that subject on Monday night, when we discuss winter keep.
My hon. Friend was right to draw attention to the considerable interest of hon. Members opposite in this matter. I read with interest about the 60 farms which a certain Member of the Government has, only six of which he farms himself. His main interest is hill sheep. No wonder he was at Turnberry, and no wonder my hon. Friend was not invited. I do not think that anybody would disagree with the changes that are being made this year. I was not surprised when the Minister told us about the increases in the years which he chose, but he could have told us that in those years when the Government switched from milk to beef there was a considerable reduction in the number


of Scottish farmers in the milk business. I remember hearing my hon. Friend the Member for South Ayrshire (Mr. Emrys Hughes) quoting with effect how many farmers had gone out of the milk business in that year. Most milk producers in Ayrshire were badly hit.
We were given figures in respect of the calf subsidies, but no figures in respect of the Fatstock Order. I congratulate the Joint Under-Secretary for explaining the Order so lucidly. He said that he did not know what it meant until he had had it explained to him. I thought I knew what it meant until I heard it explained. I looked for the figure of 130s. that he spoke about. It is not in the Order. The Minister indicates that he has it in a document, but it is not in anything that is on the Table. He is possessed of information that we do not have.
I have no desire to weary the House by asking, a lot of questions, but I want to ask one. I should like a better explanation of paragraph 7(2). I should like to know how the scheme is worked in relation to animals imported of brought into the United Kingdom from outside. Who gets the deficiency payment? It can hardly be the producer, because he is not in this country. It would be interesting to know the reason for this sub-paragraph, how the scheme works, and who receives the payment.
It is very easy to pick out one or two points from an Order and ask for explanations, and not to speak long enough to enable the Minister to obtain the necessary information. He need not worry about that. I shall not catch him out in that way.
I was interested to hear that the main purpose of the Order is to make changes that will improve the week-to-week position in the market, and even out seasonal differences to a certain extent. The Minister also said that a bonus is being provided for the farmer, to allow him to study the market. It is a pretty poor thing, with the British housewife dependent on her weekly joint, for this rather chaotic type of procedure to be gone through. There are two weaknesses in the system. First, the housewife has to pay too high a price and, secondly, the Government will have to pay deficiency payments.
If we look at the first part of the Fatstock Order we find that certain people have to be consulted and that everything has to be done with the consent of the Treasury. Although no sum has been supplied to us either in the Explanatory Note to the Order or in the statement by the Minister—unlike the position in relation to the calf subsidy—it is implicit that this will cost the country several million pounds. I should like to know how much it will be. I know that the Minister will say, "It all depends." But it will cost an awful lot just now, because there is little or nothing coming in. It is not costing him much, but it is costing the British housewife a lot. My wife often holds up our Co-op joint and says, "Do you know how much it cost?" I cannot these days begin to guess what it costs. It is fantastically costly to feed a family with decent-quality meat.
A butcher whose supervisory function covers a considerable portion of Ayrshire has told me of the difficulties in which he and other butchers find themselves in trying to obtain any meat at all. We have put down Questions about cattle being exported after calf subsidy has been paid on them. It is no good the Minister's saying that it is only 1 per cent., 1½ per cent. or 2 per cent. The subsidy has been paid in order that people may be able to have the meat on the home market. It was all supposed to be for the benefit of the consumer, as well as the producer, but evidently the consumer in this case is somebody on the Continent.
The Minister says that there will be no deficiency payment in respect of this, but I think that there might be. I am pointing out the weakness of the position.While this kind of thing goes on the Minister cannot satisfy one of the fundamental requirements, and one of the underlying reasons for doing this at all, namely, our ability to satisfy the home market.
How often during the discussions on agriculture and the discussions which we had with the farmers did we hear of their concern about getting their proper share of the home market. Whenever another market seems to be more profitable, they bypass the home market, despite the fact that the payments made in respect of them are for the benefit


of the home consumer. Are the Government thinking about this? So far as I can see there is little or nothing that they can do about it on the present basis of marketing in this country.

Mr. Kitson: Surely, from the point of view of the farmer, it is extremely difficult. If he puts an animal in the market he cannot know whether it will be bought by a Frenchman, a Dutchman or an Englishman. We cannot blame the farmers for putting business in the market for overseas buyers. Much of the cattle going overseas consists of fat cows, which is a good thing and helps to bolster up the market.

Mr. Ross: It may well be a good thing, but who has to eat what is left? The best Scots beef is never seen in Scotland. It may well be that better prices are obtained for it in the South, but we in Scotland still pay our taxes and a considerable contribution to the guarantees. The Minister knows how high they were, and if he cannot tell us the figure for this year perhaps he will refer to the figure for last year so that we may know what we are talking about and can appreciate what is involved.
No one begrudges the farmer his ability to produce beef, and it may not necessarily be the farmer who is to blame. It may be the exporter or the dealer. The weakness to which I refer is in the way in which the foodstuff is marketed, the fact that the Government are in no position properly and adequately to guarantee to the consumer that he will get the benefit from what he has paid for and paid pretty dearly at certain times. Very often the market is weak when there is plenty to choose from. But first the taxpayer has to pay through the deficiency payment, and often at a higher rate than the Minister thinks.
A decent marketing scheme may well be forced on the farmers, even by this Government. We have been considering other matters in which standard quantities are required, for example, in relation to cereals. The Measure which was passed includes power to do the same in respect of fatstock. Sooner or later, we shall realise how chaotic is a position in which year after year we go on not knowing what it is to cost

anyone. It is the housewife who suffers. We shall be driven to realise the need to establish some proper commodity system. That is bound to come and, from the point of view of the proper organisation of agriculture, the sooner it comes the better.
A few farmers would be prepared to argue about this. They want security. Let us consider what we are told about the hill sheep farms. Those farmers have to bring their animals to market at a particular time. They can hardly study the market, and what study they can undertake extends over a very short period. They may suffer at the hands of dealers. That does not worry the men in the lush pastures.
I have not paid much attention to the question of pigs and the food conversion rate and the rest of it, but it is important to notice that when the rate goes up to 4d. a cwt. the guarantee will go up 3d. a score deadweight. That is good. When the cost of living for pigs goes up, we put up the guarantee. We cannot do it for the old-age pensioners, but we can do it for the pigs. How much is involved here? Do the Government know? It is difficult for them to estimate. Obviously they anticipate that there will be an increase in relation to the beef price and the conversion rate.
I have a brother-in-law in the feed business, and so I have to listen to a great deal on this subject. I am interested to know on what the Government base their formula and whether it is accurate or not. Is it something which is incurred against an eventuality? Or are we convinced that the eventuality will come about and there will be this steady increase in relation to the basic price? Once we tend to make such provisions we tend to guarantee that there will be an increase. People are prepared to take advantage of this in the knowledge that the Government will increase their guarantee by 3d. per deadweight score.
Although we welcome the improvements that have been made, it must not be assumed that we are not critical of the continuance by the Government of a system which contains obvious weaknesses, as we have seen, and which costs the taxpayer pretty dearly. It may not have cost so much last year, but certainly three years ago we paid dearly for this


type of guarantee without gaining the advantages which we should like to see accruing to the consumer.

8.27 p.m.

The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. James Scott-Hopkins): I will try to answer the various points which have been raised in this short debate. My hon. Friend the Member for Richmond, Yorks (Mr. Kitson) referred to the lower age limit of eight months for certification for the Government subsidy. I am sure that he will accept that there has to be a limit and it has been set at eight months. So far as I know, there has been no difficulty for farmers or the N.F.U. about the general application of this period. The application form advises that certification should be done before 12 months, but the calf cannot qualify before the age of eight months. I will look into the case he mentioned. I am more than willing to examine specific difficulties arising from this scheme.
My hon. Friend raised the general point about Freisian heifers and asked why they do not qualify for the heifer subsidy. He knows the argument. The purpose of the Order is to give an incentive to beef producers. Whilst I accept his figures about milk producers and other breeds, there would be no way of ensuring that the Freisian heifer qualifying for calf subsidy for beef production would not find its way to the dairy herd. It might or might not. Of course, my hon. Friend might think it a good thing if the animal reached the dairy herd because more calves would come from it.

Mr. Kitson: This happens with the short-horned Red Poll cattle at present. They can get the subsidy, but can also get into the dairy herd. That is the difference I do not like.

Mr. Scott-Hopkins: They are a separate type of animal used mainly for beef breeding. Much as I would like to, I can offer my hon. Friend no hope on this subject at present.
The hon. and learned Member for Cardigan (Mr. Bowen) asked for the Welsh figure. I have not separate figures for England and Wales, but I can tell him that the figure for Northern Ireland was 50,000, so the figure for England

and Wales together was 350,000. I do not know whether that will help him very much, but it narrows the field slightly. He can exclude Northern Ireland from the total.
The hon. Member for South Ayrshire (Mr. Emrys Hughes) asked about the Annual Price Review in relation to these two Statutory Instruments. Both he and his hon. Friend the Member for Dunbartonshire, East (Mr. Bence) asked how much of this money was involved and where it went. This is a subsidy paid for calves. It goes to the producers when the calves have been certified after reaching the age of eight months.
In the case of fat cattle, the deficiency payment goes to the person marketing certifiable beasts—that is, most usually, the producer. I am not in a position to say what the producers do with it when they get it. I have no figures at my disposal showing what the ordinary Scottish farmer does with the money he receives from various sources. I was also asked what percentage of this went into landlords' pockets. That is really too far away from the Statutory Instruments for me to be able to give a coherent answer. It is not relevant. What farmers and producers do with fatstock deficiency payments and calf subsidy payments is their affair.
The hon. Member for Dunbartonshire, East raised the question of the export of cattle and other fatstock to Europe and this point was taken up by the hon. Member for Kilmarnock (Mr. Ross). The hon. Member for Dunbartonshire, East made a tremendous song and dance about subsidising housewives in the various parts of France with which he is presumably familiar, but this is not what happens.

Mr. Bence: indicated dissent.

Mr. Scott-Hopkins: The hon. Member mentioned Paris, Cannes and Nice. I assumed that he was familiar with these places.

Mr. Ross: He could not pronounce them as well as the hon. Gentleman can.

Mr. Scott-Hopkins: That was because he was pandering to the House's well-known wish to understand what he was saying.
The deficiency payment goes to the producer. The British housewife buys


her meat at the world market prices. The deficiency payment makes up to the producer the difference between that price and the guaranteed price which is determined as a result of deliberations between the Government and the farmers during the Annual Price Review.
The animal is sold at the world market price at the time. From that moment onwards it is no concern of the producer where it goes. It may well be that it goes overseas. But, as the hon. Member for Kilmarnock said, we must not exaggerate the situation. He put the current figure for imports at only 1 per cent. or 2 per cent., and it must be remembered that during the last three months exports to Europe have been running at a quite unusually high level. This is because there has been a shortage of meat in Western Europe generally.
An important cause has been the low level of supplies from the main exporting countries. The reasons for this go back as far as the winter of 1962–63, which created these shortages by upsetting the calving programmes. The demand for meat is stronger. None of the fatstock deficiency payment or calf subsidy payment goes to anybody outside this country. It goes to the producer here.
I must emphasise that we are concerned with only about 3,000 of the 12,000 cattle exported during March. As my hon. Friend the Member for Richmond, Yorks. said, the rest are of types not eligible for subsidy. If we prevented our meat being exported to the Continent, they would have to get supplies from other sources, namely, from the traditional exporters to our own market. So, in the long run, there would be no advantage to the housewife here, let alone to producers or traders here.
There can be considerable advantages in this small trade. I must again emphasise that it is a small trade in relation to total slaughterings. In January and March of last year there was a surplus of meat here, which meant that prices were right down. This kind of trade is a very useful outlet and helps to put a certain amount of floor into the market.

Mr. Bence: This is an extraordinarily long way round to get to the point.

The point surely is that the farmer gets no benefit from this until the world market price exceeds the guaranteed price. It has not done that. We are still making a deficiency payment. The farmer gets nothing out of it. The housewife, especially in Scotland, where much of this beef is going, because it is a big beef rearing area, gets no benefit. Every butcher says that there is a shortage of beef going on to the market in Scotland. That is why we are paying 8s. 6d. per lb, for sirloin—it is not being pitched there.
During the last year or two the Government have put on quotas and imports have fallen, so the market has narrowed. The people getting the benefit from the high Continental prices are the dealers. The person paying the high price is the consumer, the person who has to buy on a market where the volume of beef being pitched has fallen.

Mr. Scott-Hopkins: I am sure that the hon. Gentleman made a slip of the tongue. He did not mean that the Government had put quotas on beef. That only applies to the understanding on bacon market sharing, which was arrived at last October. I am sure the hon. Gentleman would wish to correct that statement. There is no question of quotas on exports of beef to this country.
The hon. Gentleman's comments as to who is benefiting from this are not accurate. He must read the Order. When the deficiency payment falls below a certain rate, there are bonus payments. Obviously, if there are buyers who want to buy the meat in order to send it to a strong market elsewhere, this will strengthen the market and improve the position for the producers. It is no good the hon. Gentleman making faces. What I say is so. I advise the hon. Gentleman to read the Fatstock Order and he will then realise what I am talking about.

Mr. Ross: It means that what we are effectively doing is subsidising exports.

Mr. Scott-Hopkins: The deficiency payment is made after the meat has been sold at the world market price. The average weekly price is calculated on this basis. The deficiency payment makes up the difference between that price and the standard price for the


week, and it goes to the person who markets the certifiable beast. That beast is sold at world market prices. There is no element of subsidy in that.

Mr. Bence: As I understand it, a beast is marketed in the ring by the farmer. It is bought by the dealer and that is the price at which the farmer gets his deficiency payment. When the beast is slaughtered the carcase goes to the butcher, abbatoir or elsewhere; but the farmer got his deficiency payment before the beast was slaughtered

Mr. Scott-Hopkins: There are different forms of marketing, although this is not the occasion on which to go into the intricacies of the marketing system. A great deal of fatstock goes direct from the farmer on to the hook, and it is at that point that the farmer gets the price for the beast and, therefore, the deficiency payment. In many cases the farmer sells direct to another farmer. In other cases he puts the beast into the market and it is bought by an abbatoir.
The hon. Gentleman is not right in saying that the majority, or even a large proportion, of fat beasts which go to the market are bought by dealers. As I have pointed out, there are different forms of marketing and much beef goes direct into the abbatoirs. That is the way the trade has been built up over the years, but it has no bearing on the hon. Member's general point about beef going overseas after receiving a deficiency payment.
The hon. Member for Kilmarnock asked about the significance of 29th October. He will know that in the White Paper, following the Annual Review, it is shown that we agreed with the N.F.U. that the Scheme, which finishes in October, should be renewed for a further three years from that date. The hon. Member queried whether the Government intended to continue the Scheme for many years, but there will be other opportunities to discuss that subject.
The hon. Member for Kilmarnock then spoke about the level of prices and wondered whether they would be continued. He was, I believe, talking about the fatstock subsidy for the year after this. As he knows, this will be reviewed at the next Annual Price Review,

when a determination will be made. He will not expect me to go into that matter now. The hon. Member also suggested that, until my hon. Friend made his clear speech explaining how the deficiency payment levels worked, he did not have the necessary information. He will be aware that this information is available in the Vote Office. The Fatstock Guarantee Scheme is there for all hon. Members to see and it includes the tables of standard prices to which my hon. Friend referred. I am sure that the hon. Member for Kilmarnock has seen this document. A closer study of it will give him the facts he wants.
The hon. Member for Kilmarnock then asked me to break down the calf subsidy figures for Scotland as opposed to England and Wales. I am sure that he will appreciate that I cannot do that. Neither am I able to give him an estimate of what the second Scheme will cost this year. Many factors come into this and it would not be prudent of me now, in week three or four, to give a forecast covering the whole of the 52-week period.
I can assure the hon. Member that it is the purpose of this Scheme and of the new standard prices and bonuses, which have been worked out in conjunction with the N.F.U., to encourage better marketing patterns, which will have a beneficial effect on the farmers and taxpayers.

Mr. Ross: Surely the Government must have had some figure in mind when they decided on this Scheme in discussions with the farmers. What figure had they in mind?

Mr. Scott-Hopkins: Although the final audit adjustment for last year has not been made, the cattle guarantee cost about £43 million. Since then there has been a 3s. per cwt. increase in the guaranteed price.
Our purpose is to encourage orderly marketing and to make farmers pay more attention to the movements of the market so that they will not be inclined to drop on to a falling market, but will, as far as practicable, be able to sell at the right time for the right profit.

Mr. Ross: But we must have Estimates in this House. The Government


are to put in Estimates of what they think will be the cost. What is the Government's Estimate here?

Mr. Scott-Hopkins: The hon. Member will realise that the Estimates were put in at £43 million. He will also know that the increase in the value of support for cattle at the Price Review is £4·5 million. In this matter, the hon. Gentleman's mathematics are as good as mine.
The hon. Member will realise that the feed formula, which is based on the food conversion ratio, can work up or down. It has been in existence for a long time. The feed formula affects the guaranteed price to pig producers, and the purpose of these changes is to bring about a more realistic relationship between the adjustments under the feed formula and the conversion ratios achieved in current rates of live-weight gain. There have been great advances in techniques in past years, and food conversion ratios have improved. We seek in the Order to reflect the modem food conversion ratios. This has not been so in the past, when we were using an older and more out of date formula. There is no change for the consumer.
I have covered all the main points that have been put in this debate——

Mr. Ross: Can the hon. Member answer the point about paragraph 7(2)?

Mr. Scott-Hopkins: I apologise to the hon. Gentleman for my omission. As the hon. Member will know, imported cattle have to be in this country for a certain time in order to qualify for the full guarantee payment. They have to be fattened here for a certain time, and in addition it is only right and proper that they should qualify for a smaller rate of deficiency payment. In fact, we have only a differential rate for sheep.
By passing these Statutory Instruments, we shall be encouraging a more orderly system in the fatstock market by making the farming community pay more attention to market trends. In many ways we are simplifying the existing system. It may take a little time for the farming community to get used to it, and to not having, when they market, a provisional figure of deficiency payment that is liable to error on either side. I am certain, however, that once the system

is understood and has worked for a short time the farming community will find it greatly to their benefit; and that the whole agricultural industry will, in the long run, benefit from adopting the new system. I have no hesitation in recommending these Statutory Instruments to the House.

Question put and agreed to.

Resolved,
That the Calf Subsidies (England and Wales and Northern Ireland) (Amendment) Scheme 1964, a draft of which was laid before this House on 23rd April, be approved.
Calf Subsidies (Scotland) (Amendment) Scheme 1964 [draft laid before the House, 23rd April], approved.—[Mr. Stodart.]
Fatstock (Guarantee Payments) Order 1964 (S.I., 1964, No. 463), [copy laid before the House, 26th March], approved—[Mr. Scott-Hopkins.]

RIDING ESTABLISHMENTS [MONEY]

Resolution reported,
That, for the purposes of any Act of the present Session to regulate the keeping of riding establishments it is expedient to authorise the payment out of moneys provided by Parliament of any increase attributable to the provisions of the said Act in the sums payable out of moneys so provided by way of Rate-deficiency Grant or Exchequer Equalisation Grant under the enactments relating to local government in England and Wales or in Scotland.

Resolution agreed to.

NEW FOREST BILL [Lords]

Order for Second Reading read.

8.51 p.m.

Sir John Eden: I beg to move, That the Bill be now read a Second time.
In the unfortunate absence, through illness, of my hon. and gallant Friend the Member for New Forest (Sir O. Crosthwaite-Eyre) it has fallen to me to move the Second Reading. Before I deal with the Bill, I am sure that the whole House will wish to express the hope that my hon. and gallant Friend will speedily return to active service here. I am sure, also, that they would wish to congratulate him on the amount of work that he has done in leading up to the preparation of the Bill. He was chairman of the committee which was set up to establish the Bill and he has been working on it


ever since 1961. It is a particular shame that, having put in so much time on it, he cannot see his efforts carried a further important stage along the road which I hope will culminate in the Bill being put on the Statute Book.
This is not, of course, the personal Bill of my hon. and gallant Friend. It is supported by a number of associations actively concerned with the wellbeing and general interest of the Forest and forest dwellers, and in "forest dwellers" I include animals as well as man. The societies concerned are the New Forest Association, the New Forest Commoners' Defence Association, and the New Forest Cattle and Pony Breeding Association.
The general terms of the Bill were also discussed at some length with, and have received the general approval of, a number of other very notable bodies and authorities. These include the Forestry Commission, the Council for the Preservation of Rural England, the National Trust, the Royal Society for the Prevention of Cruelty to Animals, the Commons, Open Spaces and Footpaths Preservation Society, the, British Veterinary Association, and, in the main and in general, the National Farmers' Union. I recognise that there is a small exception here, but an important one in the context of the Bill, in that in the branch of the National Farmers' Union most actively concerned with certain of the interests affected by the Bill discussions are still proceeding. I believe that at this stage the branch has not given its general approval to the terms of the Bill.
I am sure that no hon. Member would dissent from the main purpose of the Bill as a whole. It is to reduce, in so far as it is humanly possible to do, the number of accidents caused to animals, with resultant loss of life to the animal and in some instances severe damage to the driver of the vehicle within the perambulation of the New Forest. The Bill seeks to achieve this fine objective by the general method of fencing the perambulation, fencing certain roads, and constructing a number of grids. The Bill seeks to bring into the general perambulation of the New Forest certain areas of land and commons which are now adjacent to the forest. Naturally, I shall have more to

say about that aspect later on, because it is around this feature that the main discussion has taken place and the main controversy exists.
May I first of all say that this Bill, I understand, is what is called a hybrid Bill and is, therefore, subject to hybrid Bill procedure. It has already been through Second Reading in another place. It has also been to a Select Committee in another place and will, if it is desired, go to a Select Committee of this House.

Dr. Horace King: It has also had its Third Reading in another place.

Sir J. Eden: It has. I was going on to say that it has also had its Recommittal and Third Reading in another place, and so considerable discussion has already taken place on some of the points which we shall be discussing, as hon. Members who have taken an interest in the proceedings will be aware. It is for this reason that I shall not cover the ground at any considerable length, for I know that those hon. Members who have been interested in this matter will have studied the proceedings in another place most closely.
May I first of all give a very brief historical note by way of background to this Measure. The presence of a forest in that part of this country goes back to the days of King Canute. In those days it was known as the Old Forest. After the Norman Conquest the forest was enlarged and subsequently became known as the New Forest. The New Forest was the last Royal forest to be created in England.
Over that period of time throughout our history it has been the subject of a number of Acts of Parliament. I will not weary the House by listing them all but the last one is important for us in this debate. That was the Act of 1949 which followed on the Report of the Baker Committee which reported in 1947. That Act of 1949 put into legislative form most of the recommendations of the Baker Committee, but not all.
One of the recommendations referred to the right of vicinage which gives to the owners of rights of common of pasture in the New Forest the same rights over adjacent commons, even


though those adjacent commons may be outside the perambulation of the New Forest itself. I will come back to this point because there is a Clause referring to it later on.
Since 1949 there have been some very important developments in the New Forest, not least the trend towards industrialisation in the immediate vicinity and even to some extent within the precincts of the forest itself. This is most notable in the part along Southampton Water by Fawley where there have been constructed a major oil refinery and a number of other major industrial concerns.
In addition, we have witnessed in the New Forest area, as has everywhere else in the country, the development of faster moving road vehicles and this itself has brought out and emphasised afresh in the most tragic circumstances the high rate of accidents which the presence of animals and fast moving road vehicles inevitably and regrettably seem to cause. In fact, the number of animals killed in 1955 was 170. In 1963, it was 349, a slight reduction on the number killed in 1962, which was 378. The Bill is primarily directed to an effort to reduce the appalling number of animals killed and the resultant injury and damage to persons and property.
I turn now to the actual Clauses. Clause I alters the existing perambulation of the New Forest. It does this by bringing within the perimeter certain additional areas of common and other land adjacent to it. It is designed also to extend the powers of the verderers of the New Forest to these added areas. By subsection (1), areas are added and areas are excluded. The areas added amount in total to about 7,500 acres and the areas excluded amount to 9,000 acres, so the net result is a small reduction in the total acreage of the New Forest. But the real result, of course, will be to produce a much more realistic forest area than at present exists, for most of the areas to be excluded cannot be classified as forest at all. Some of them, notably towards my own constituency, are extremely dangerous in that there is a by-pass road running through them.
The areas which are brought by the Bill within the perambulation of the New Forest are mainly areas of common land and National Trust land and, in some instances, private land with common rights attached where animals are already depastured by those who live adjacent to or on the commons themselves.
Subsection (1), by bringing in these adjacent and common lands, will have the most important effect of, as it were, rounding off the New Forest as a whole and making it much more readily possible to fence the whole of the perimeter and therefore to enclose the entire perambulation.
Clause 1(2) extends to the added areas the powers of the verderers of the New Forest. Under their powers, the verderers are mainly concerned with the health of animals. They seek to ensure that, within the perambulation of the New Forest as it exists today, diseased animals are not allowed to roam but are taken off quickly. They seek to ensure that any animal which is ill or injured is treated as soon as possible. They further seek to ensure that, by careful registration of the stallions which are released on the New Forest, the standard of the New Forest pony breed is maintained as high as possible. Also, they help the animals during the winter months by giving special winter care and extra feed if needed.
For all these services, a small marking fee, as it is called, is charged. This marking fee today stands at 20s. per animal per year. The marking fee is the main source of income of the verderers and provides the source of funds out of which they can pay for the employment of agisters to carry out the work I have described. I feel that the services which are provided under the byelaws of the verderers are substantial benefits and that this is a reasonable fee to pay in return for these services.
I readily recognise, however, that in Clause 1(2) we are saying to those who have common rights on the adjacent commons which will become the added areas that from now on they will have to pay the marking fee which hitherto they have not been required to do and that their animals will have to be subjected to the same standard requirements as those animals already turned out on


the existing New Forest. By way of compensation for this, it is fair to point out that these people will have access for the pasturing of their animals not just to the commons adjacent to their own homes where they are now but throughout the New Forest. Therefore, they will have a much greater area of pasturage open to them.
In Clause 1(3), it is proposed to extend the Forestry Commissioners' byelaws as distinct from the verderers' byelaws. The Forestry Commissioners' powers are described in Section 2 of the Forestry Act, 1927. They chiefly concern the lighting of fires, camping, the parking of motor vehicles and the prevention of nuisance. It is proposed to extend these byelaws to the areas added to the perambulation provided that those areas are already subject to common rights.
In Clause 1(4), the land within the added areas which already has rights of common of pasture is given the same rights even though as a consequence of the Bill they will become included within the new perambulation of the New Forest. Subsection (4) also specifically includes those cases in which the existence of rights is debatable legally but in which, nevertheless, the people concerned enjoy a de facto privilege of turning out animals. This Amendment was written into the Bill during earlier stages in another place and it has been covered by adding the words "privilege of pasture". I think that it will generally be seen to meet the point of those who feel that they have always enjoyed rights of common of pasture even though those rights cannot be substantiated in a legal form.
Clause 2 is more simple. It has been described as a machinery Clause. It provides the method by which the additional plan to show those areas to which rights of common are attached should be prepared. The plan is known locally as the Atlas. It has marked on it the perambulation of the Forest and those properties which have common rights attached to them. The Clause will bring the Atlas up-to-date since it was last prepared by the Forestry Commission under the 1949 Act. The Clause contains provision for appropriate consultation, and, as in the 1949 Act, it confers the right to object to the

additional plan, when prepared, should any commoner feel it necessary to do so in his own interests.
Clause 3, one of the most important Clauses of the Bill, deals with the general question of fencing. By subsection (2), the verderers will be enabled to erect fencing along or adjacent to the altered perambulation of the New Forest for the purpose of containing animals. This means that a ring will be put round the New Forest. This fence, together with the cattle grids now being constructed by the Hampshire County Council as the highway authority, will provide a form of protective seal around the whole of the New Forest, thus preventing animals from within the forest from getting out and also protecting the animals within from having contact with animals which are now outside it. It will also have the important byproduct of preventing the straying of animals outside the perambulation, thus substantially reducing accidents in the areas adjacent to the Forest where drivers of motor cars do not normally expect to find animals wandering.
Subsection (4) of the Clause gives the verderers power to erect what is called drift fencing. This is fencing which is placed in certain areas with the specific purpose of encouraging or diverting animals to go to other areas to cross major roads. At present, animals move freely across the forest. In some places where they cross to get to water holes, for example, they happen to choose extremely dangerous parts of the road. The erection of extra drift fencing at these places will prevent the animals from crossing at those points and will, it is hoped, divert them to points higher up or lower down the road but less dangerous than those which they have habitually used.
The powers in Clause 3 are confined throughout to the open wastelands of the forest—that is, the Crown land which is subject to common rights—and to a small portion of other land most of it carrying common rights and belonging to private individuals or to the National Trust and which is marked on the plans deposited with the Bill.
Clause 4 also deals with fencing and gives permissive powers to fence the whole of the main road, the A.35, from Southampton to Christchurch where it


traverses the New Forest. These powers are similar to those already conferred by the 1949 Act in respect of the A.31, which is the Cadnam to Ringwood road. The A.31 is the main fast through road of the area and the fencing on it is already well advanced. As I use it frequently, I assure hon. Members that it has considerably reduced the presence of animals on the road verges and has thus contributed greatly to the recent noticeable reduction in accidents.
If hon. Members wish to raise any points on the Clause, I shall endeavour to deal with them. At this stage, I merely say that the public right of access will continue to be provided for as far as possible by the construction of wicket gates and stiles along the fences. To ensure that animals may continue to roam freely as they have done in the past, underpasses will be constructed for them, so that while they will be prevented from crossing the metalled surface of the road, they will still be free to roam from one side of the forest to the other by means of specially constructed underpasses.
Those who are responsible for the construction of this fence will have in mind the aesthetic requirements of the forest as a whole in choosing the type of fence which is constructed. This is a very important Clause when we bear in mind the speed at which vehicles travel. If I may interject a personal view, I would much rather that the Clause had been strengthened by the provision of a speed limit. I was not impressed by some of the arguments against the introduction of a speed limit and I cannot understand why we should not at least make the effort to educate the travelling public and to remind people, even if only at the beginning and end of the road, that they are entering a special area which requires special care and warrants special measures.
I can explain Clause 5 quite simply by referring hon. Members back to Clause 3 when I spoke of the construction of the protective seal. In future years there may be developments within the perambulation of the forest which might require the construction of a new access road. If that were done and there were no grid and no special measures were taken, there would be a

gap in the protective seal. The point of the Clause is to provide that any gap which is subsequently created in the seal shall be closed by the provision of a grid and other necessary measures.
Clause 6 is an amendment of Section 18 of the 1949 Act. It enables the Minister of Agriculture to authorise the appropriation by the Forest Commissioners of open waste land for camping sites. The powers here are restricted to that part of the existing New Forest which is owned by the Crown and subject to common rights. They do not extend to the added areas. At present, camping areas are unrestricted and anybody who has seen the New Forest after a holiday weekend in the summer will share my horror and disgust which I inevitably feel at the conduct of one's fellow men in these circumstances. It is quite fantastic.
Last year, about 7,000 milk bottles alone were collected from the New Forest. This is not only unsightly and unattractive but extremely dangerous to the animals, because many of the bottles get broken and the animals cut their fetlocks on them. This is an appalling source of damage to the forest animals and the result of thoughtlessness on the part of those who enjoy the amenities of the forest for camping.

Mr. Emlyn Hooson: Do I understand that the hon. Gentleman takes the view that this Clause would prohibit camping elsewhere in the forest?

Sir J. Eden: No, that is not so. I am glad that the hon. and learned Member asked that question. If I gave the impression that that was so, I apologise to the House. Camping can still take place elsewhere, but it will tend to become slightly more regularised since even man tends to be somewhat governed by the herd instinct in these circumstances. I think that this will reduce the amount of damage caused by the leaving of litter through general camping. This provision will not interfere with the rights to unrestricted camping throughout the whole of the forest.
Clause 7 gets us away from the matters which we have been discussing to another interesting subject. This is referred to as pannage. Pannage is the right to put pigs out on common land


in order to feed on the acorns and beech mast. At present, the timing of pannage is fixed to certain dates, namely, between 25th September and 22nd November. This fixing of the dates does not take account of any seasonal fluctuations which may occur due to weather or other circumstances and it does not take account of the presence or absence of the particular food on which the pigs are to feed. The Clause gives the Forest Commissioners power to fix a pannage time, of not less than 60 consecutive days, which is the present time, after consultation with the verderers, at any time when conditions are right for this to be done. This, again, does not apply to the added areas.
Clause 8 enables the verderers to make temporary enclosures for the purpose of preventing the suffering of animals during spells of exceptionally severe weather. This Clause, I think, will be particularly welcome. The very hard winter that we had the year before last caused a great deal of work for the verderers and people seeking to care for the animals, and by this Clause they will now have powers to make a temporary closure to collect them altogether, which will facilitate their care during periods of exceptionally hard weather.

Notice taken that 40 Members were not present;

House counted, and, 40 Members being present—

Sir J. Eden: I was about to turn to Clause 9. In explaining the purpose of this Clause, I should point out that under Section 1 of the 1949 Act there are 10 verderers, four of whom are what are referred to as appointed verderers. This Clause gives power to pay reasonable travelling expenses for these appointed verderers when they attend the official meetings.
Clause 10 would enable the verderers to authorise the Forestry Commissioners to create new ornamental woods and to enclose land for this purpose. The powers under this Clause would be restricted to that part of the forest now owned by the Crown and subject to the rights of the commoners. They would not refer to the added areas, and I should emphasise that no single enclosure under this Clause shall exceed 20 acres in area.
Clause 11 is a precautionary Clause in that it ensures tha the Forestry Commissioners' byelaws shall continue to apply to land transferred or enclosed for highway purposes. It refers to verges alongside the roads which are subject to fencing. It is designed to make sure that no camping, for instance, can take place on the roadside verges in the forest.
Clause 12 makes provision for an increase in the maximum fine for offences under the verderers' byelaws. This is quite a reasonable point. The present maximum was fixed as long ago as 1877, and it is fair that it should be brought up to date. Clause 13 makes a similar provision in respect of the Forestry Commissioners' byelaws, and Clause 14 refers to the payment of expenses which arise under the Bill, and describes how they are to be raid.
Clause 15 is an important Clause, although it is completely non-controversial. It reminds the Forestry Commissioners and the verderers that they shall have particular regard to the need to conserve the flora and fauna of the forest, and to preserve any geological or physiographical features of special interest. Clause 16 safeguards the position of the National Trust under the National Trust Acts, 1907–53. This Clause has been approved by the National Trust.
That completes my survey of the Clauses. I am sure that no hon. Member will dissent from the general purposes of the Bill, and it is therefore with confidence that I ask the House to give it a Second Reading.

9.26 p.m.

Dr. Horace King: First I ought to congratulate the hon. Member for Bournemouth, West (Sir J. Eden) and his friends—and the Government—for surviving the procedure which has just been resorted to by the hon. Member for East Grinstead (Mrs. Emmet), which, if successful, would have effectively killed the Bill. The Government found great difficulty in allowing time for a Second Reading debate, and if the hon. Lady's effort had been successful they could not have found time for another Second Reading debate.
I also congratulate the hon. Member for being the father of a boy and the


godfather of a Bill all within 48 hours. I sincerely congratulate him on his speech, especially in view of the fact that nobody knew until late last night that the Bill was to be on today's Order Paper, and also in view of the fact that he had to deputise for his hon. and gallant Friend the Member for the New Forest (Sir O. Crosthwaite-Eyre) at very short notice. I am sure the House will agree that the hon. Member has given us a very lucid and fascinating picture in explaining this important little Bill.
I will not follow him into matters of history, tempted as I am to do so, because I love the history of the New Forest. I will merely remind the House that Westminster Hall would have been the bedroom of a great Palace if it had not been for some commoner in the New Forest who murdered William Rufus before he got Westminster Palace going. If he had succeeded we would probably not be having debates now about the Gothic character of the extension that we are about to make to the Palace.
Some of us steadily objected to the Bill every Friday on which its promoters tried to get it through the House at Four o'clock without a debate. We did so because we believed it wrong that a Bill of this magnitude, even if it has the blessing of the Government, should be silently approved on a Friday afternoon, especially by hon. Members who have been sitting in the House on Fridays objecting to similar Private Members' Bills which have already been debated—Bills like that of my hon. Friend the Member for Eton and Slough (Mr. Brockway) on racial discrimination, and my hon. Friend the Member for Newcastle-upon-Tyne, Central (Mr. Short) on concessionary fares for old-age pensioners. I am glad to have succeeded in forcing the Bill to be debated in the open in the House. The speech of the hon. Member is abundant justification of the stand that I have taken during the last three weeks.
I, too, am sorry that the hon. and gallant Member for the New Forest is too ill to be here. We have fought each other since, in 1945, we fought up and down the New Forest. We have now fought each other for 19 years. That fight has always been political and never

personal. Although we have been fiercely opposed politically, we have never had a cross word in those nineteen years. I pay tribute to the work of the hon. and gallant Member in preparing the Bill. An attempt was made to reconcile almost all the interests concerned in the Forest, local government, verderers, commoners—these two are the same thing as a matter of fact—and the cattle breeders—again the same thing. It was not difficult to reconcile the claims of the New Forest cattle breeders, the New Forest Commoners' Defence Society, and the verderers of the New Forest because they are the same people wearing different hats.
I say that he deserves credit for all that he has done, but I am going to attack certain features of this Bill. The illustrious grandfather of the hon. and gallant Gentleman fought magnificently for the commoners against enclosure and even against the Crown. He would have been on my side in the criticisms which I propose to make. This is indeed a hybrid Bill. A Private Bill deals with some private citizens and gives them some some special privileges not offered to other citizens. This Bill certainly does that. According to Mr. Passmore, Secretary of the Commoners' Defence Society, who gave evidence before a Select Committee in another place, the passage of this Bill will add to the value of the property of commoners inside the New Forest. But, although it is not spending public money, it gives permission for the spending of public money, of the ratepayers and the taxpayers, to a sum of, perhaps, £100,000.
The Liberals—to whom I shall refer later—estimated the amount at £150,000. I am one of those who are a little troubled about the form of this Bill. In Clause 17(3), printed in black to safeguard the constitutional position of this Private Bill, it is stated:
Nothing in this Act shall impose any charge on the people or on public funds, or vary the amount or incidence of or otherwise alter any such charge in any manner, or affect the assessment, levying, administration or application of any money raised by any such charge.
Yet in Clause 14(3) it states:
Any increase attributable to the provisions of this Act in the sums payable out of moneys provided by Parliament by way of Rate-Deficiency Grant under the enactments relating to local government in England and Wales shall be defrayed out of moneys so provided.


It seems to me to be a contradiction within the Bill This again is a reason for not allowing this Bill to have a Second Reading without a single word being spoken in the House of Commons.
An even greater reason so far as I am concerned is that part of the Bill, I believe, is unjust to a group of my fellow citizens. There is considerable support for the Bill. There is support from the New Forest Commoners, the commoners inside the present New Forest. If the Bill becomes law, they eventually will put up a small sum of money, probably about one-tenth of the amount involved, against ten times as much from the ratepayers of Hampshire or the taxpayers of the country. There is opposition to the Bill, too. I believe this Bill ought to go to a Select Committee before which those citizens who have a grievance against the Bill and do not support it should be heard. It may be that they are a minority. I shall speak later of the case of the small minority, and I believe that this place exists to protect minorities.
Let me destroy the illusion that this Bill represents the unanimous views of everyone living in the New Forest. The New Forest Labour Party opposes the Bill. It appreciates that new legislation is necessary for the forest, but urges that rather than proceed with a Bill in this hybrid way the Government should set up another Commission, like the Baker Commission after the 1949 Act, to inquire into the whole state of the New Forest, its customs, practice and economy, before new legislation is introduced. They believe that, in this modern age, the whole question of the rights of the commoners in the New Forest—some which date back for centuries and others which may have been bought last week or a year ago—need to be re-examined. They believe that the Verderers' Court, of which the promoter of this Bill is, I believe, the Chairman, is an anachronism, and that all inhabitants of the forest ought to be represented on a body if we are to leave that body in control of the forest.

Sir J. Eden: I do not think that my hon. and gallant Friend the Member for the New Forest (Sir O. Crosthwaite-Eyre) is the Chairman of the Verderers' Court.

Dr. King: I think that he is a member anyway.
To paraphrase the remark of Dunning, a former Member of Parliament, the power of the verderers has increased, is increasing, and ought to be diminished. The New Forest Liberals produced an excellent memorandum on the Bill and its implications. There are various suggestions for improving the Bill. They share the view of the New Forest Labour Party that 400 out of the 700 commoners who are New Forest commoners which have privileges and exercise powers contrary to the wider national interest. They believe that the forest ought to belong to Britain and that the Court of Verderers ought to be truly representative of all who live there. They agreed with the New Forest Socialists that the formula, "No taxation without representation", means that if the taxpayers who are not commoners are contributing to the well-being of the forest they should be represented.
Many Liberal and Labour folk in the forest believe that although the main objects of this Bill are praiseworthy, the preservation of amenities and the saving of lives of animals and human beings could be better achieved by limiting the number of animals allowed to graze in the forest and enclosing certain parts in which those animals could go. The Lyndhurst Parish Council—not a Labour Party-controlled organisation—is on record as having declared its opinion that the number of animals in the forest ought to be limited to those for whom the commoners could provide shelter in the winter.
I am glad the hon. Member mentioned the unanimous view of the Liberal Party and the Labour Party in the New Forest, that there should be a speed limit on cars going through the forest of 40 miles an hour. I believe that many of the suggestions made by the Liberal and Labour Parties are sound and that sooner or later we shall have to democratise the Verderers' Court, which consists of ten people, five of whom are commoners and five of whom are nominated by various bodies. I also believe that we need a full inquiry into this unparalleled beauty spot which belongs to Britain as it belongs, in part, to the commoners, and that such a full


inquiry should be followed by a public Bill.
In the meantime, however, I differ in one respect from my Labour and Liberal colleagues in the forest, whose broad views I share in their attitude to the Bill. I gather that they would, if they could, prevent the Bill becoming law. We have long ago destroyed the idea that commoners own the forest, just as they even longer ago destroyed the idea that the Crown owned it. We have managed to reconcile the claims of the Forestry Commission and the commoners, and it is a simple fact that the animals which graze in the forest not only add to its natural beauty but are also responsible for the state of the exquisite greens in between the trees. I believe that the commoners give to the forest as well as take from it.
The idea of enclosure may be scientifically the best way of preventing accidents, but it would take away one of the great charms of the forest because one of its beauties is the animals roaming about and that one meets as one wanders through it oneself. At present, the grim fact is that modern traffic is making the destruction of animals and human beings in the New Forest a steadily increasing nightmare.
I will not add to the figures quoted by the hon. Gentleman. We have considered these accident figures in the Hampshire County Council year by year with growing alarm, and, as a council, we have done something, through the provision of cattle grids, to prevent at least some accidents. I believe that we cannot have motor cars, animals grazing and an unfenced forest at the same time. I believe that the Bill, although it does not solve the large problems that I have raised, at least goes some way towards doing so and I therefore support it.
The two chief roads through the forest are the A.31 and the A.35. In that strange way of ours in approaching such matters, we have empowering provision for fencing the A.31 in the 1949 Act. The Bill gives authority to the Minister and, through him, the local authority, to fence the A.35.
It would be unjust and unreasonable to expect the commoners to pay the

whole cost of fencing the two roads. They could not do it, anyway. I doubt whether they have even paid all the money they owe for fencing the A.31, which was one-tenth of the total cost. Even if they only pay one-tenth of the cost of fencing the A.35 they will be shouldering a considerable burden.
Although the Bill does not mention the cost of fencing, the commoners have an eye to the main chance and in one Clause secure that, if the highway authorities take part of their private land which gives them their common rights in order to do the fencing, they must pay compensation. I believe then, that Britain ought to meet most of the cost of the fencing. It is something for the good of Britain—and I say "Britain" rather than Hampshire, because the New Forest is a national heritage and not merely a county heritage. I believe, too, that the fencing is a matter of urgency and it is because of these two reasons that I would not vote against the Bill.
However, I now want to raise something which is, in my opinion, a very grave matter. At present the New Forest commoners have ancient rights and the Bill does not disturb them. I believe that a Bill which safeguards, preserves and assumes the rights of some commoners ought not to take away other commoners' rights. But Clause 1 does so. The promoters say that it will be convenient, tidy and safer for man and beast if the New Forest is trimmed up a little, if we add to the forest some nice grazing land and if we very generously take out of the forest some bad grazing land.
But when they do so, they are bringing into the forest land whose owners have common rights quite distinct from the rights of the New Forest commoners, rights which they regard as being as precious as the rights of the foresters. They are not in the New Forest and do not wish to go in. These men include those who petitioned the Select Committee in another place from Furzley, Half Moon, Penn, Plaitford, West Wellow Commons and Black Hill.
Throughout the long time that the Bill has been in the process of gestation, some of these men have been coming to see me. They have urged me to do what I can to protect their rights. This is what I seek to do tonight. Their common


lands have never been within the perambulation of the New Forest. They have the right to de-pasture cattle and ponies and to turn out pigs in the extra forest commons without payment. They have had this right for very many years. One old gentleman who comes to see me speaks of his grandfather and his great grandfather having had this right as far back as this old man can remember.
If they are brought into the forest perambulation, they will have to pay £1 a year marking fee for every animal they have. Some of them are dairy farmers. This might mean £25 to £50 a year if they have 25 to 50 cattle. They are responsible men. Even the opponents of these commoners—I shall speak of the opponents later—giving evidence before the Select Committee of another place, had to admit that these men have their own honorary agisters; they have volunteers among themselves to do the work that professional agisters do inside the forest looking after straying or diseased animals. They are not against the fencing of the forest. They have said from the start that they do not mind paying a cash sum for some fencing. They object, however, to any tampering with their ancient rights as commoners.
The hon. Gentleman argues that these commoners will gain from joining the larger group. These, on the other hand, believe that they have nothing to gain, but are, indeed, in danger of losing something, because for the maintenance of their common rights as they come in they will have to apply to the Verderers' Court, which will adjudicate on whether their common rights are really tenable. I shall have something to say about that later.
So they urge that they be taken out of the Bill. I believe that a Bill which is based on the right of New Forest commoners and which perpetuates this right ought not to deprive these men of similar rights by giving the Verderers' Court, a private court, the power to tax them.
It is a singular irony that the commons of some of the commoners for whom I plead were bequeathed in the will of the grandfather of the promoter of the Bill. I believe that, if he were here, he would be fighting for the men using the commons rights which he bequeathed some 80 or 90 years ago. They have never had the

right to graze on the New Forest. If they graze on the New Forest they apparently pay for it, but the New Forest itself has claimed the right of vicinage, or neighbourhood—neighbourhood rights to graze on the common lands outside. At any rate, the verderers claim that this queer anomaly is so, although counsel in the Select Committee in another place argued that this queer anomaly might not be right. Indeed, one suspects that it is because the New Forest commoners would lose this right of vicinage, of going over the border into the common land outside their present New Forest if the fences were built, that they are so very anxious to get that common land within the fence, so that they would not lose their right of vicinage.
Moreover, if the Forest is fenced at its present perambulation and these commons are left outside, it is estimated that this would cost about £2,500. At any rate one factor working in the minds of the commoners of the Forest is that they would have to meet one-tenth of that £2,500—£250. So they have a vested interest, apart from the noble picture presented by the promoter of the Bill in adding this little bit to the forest to bring these commons within the perambulation of the forest.
In the Select Committee of another place attempts were made to suggest that these men did not really know what they wanted. I call attention to the remarks of Mr. Pasmore, the Secretary of the New Forest Commoners' Defence Association. He gave the picture of his attempt to find out the views of these commoners, and in question 131, on page 20 of the Report, he was asked:
How many of these did you interview personally?
The answer was "27". In question 132 he was asked:
What were the results of those interviews?
He answered:
Twenty, I think, were in favour unreservedly, four were in favour subject to a certain concession, two could not have cared less, and one was against.
Yet when in question 133 he was asked:
How many of those whom you personally interviewed have now signed the Petition against the Bill?


his answer was "Nineteen". The suggestion was that they did not know their own minds.
Further evidence before the Select Committee makes quite clear—and I can vouch for it because these men have been coming to me during the last few years—that they do not want to lose their common rights. Their view has been consistent throughout. They do not want to be taken into the forest and they do not want to be subject to the Verderers' Court.
Anyone who reads what has happened during the months can see what has taken place and what is their view. The Ringwood branch of the N.F.U. is against the Bill. That branch of the union, as the hon. Gentleman pointed out, is the most concerned with the Bill. It consists largely of farmers in the forest. I quote from the report of the branch meeting.
Captain Moore said the commoners felt very strongly about this matter. They had a freehold right when they bought their properties to turn out on these commons. The verderers had no jurisdiction over these commons and it was their wish that the commons should be administered by Commons Committee. They had already got two honorary agisters. They did not oppose the Bill, it was a matter of taking away from them their freehold rights.
Here is a letter from Mr. F. E. Reynolds:
I write on behalf of the commoners of Bramshaw, Plaitford, Cadnam and West Wellow to ask for your help when the New Forest Bill is before the House of Commons on Friday next. As you no doubt know, if this Bill proceeds in its present form we shall lose our free common rights, rights that have existed for hundreds of years. Not one commoner who uses these free rights would object to paying to a gridding and fencing scheme, in spite of the fact that some say we want something for nothing. I can assure you that is not so. We would ask you to object to this Bill on our behalf so that we do not lose our free rights".
This is a letter from Bramshaw. The writer states:
Sir Oliver Crosthwaite-Eyre's Bill is being presented to the House of Lords this week and we hope you would read the Bill, as we would like you to object to paragraph 15"—
as it was then
—which is bringing in the National Trust Commons with the New Forest, as the commoners do not want to come in under the bye-laws of the verderers. Section 3 of the Act.
We are not objecting to anything to do with the New Forest fencing, etc., only the Bramshaw and Plaitford Commons
I admit that I am pleading for about 3,000 acres and a handful of men, against about 70,000 acres and 700 men, not all of whom, however, use their common rights. Indeed, the men who are concerned most by the common rights are quite rich people. But each group has the same kind of rights—either all, or none at all. I am against the big fellow who, to quote one of them before the Select Committee, would "fight jealously" for his right of vicinage but who would object to the little man fighting equally jealously for rights that are either as good as or as bad as his.
The National Trust is supposed to protect commoners. I want to register a profound protest at what is revealed in the evidence before the Select Committee in another place, which shows clearly that the National Trust sacked the local commoners' committee because it did not give in and consent to the commons coming inside.
Referring to a meeting of the Management Committee, we read in the answer to Question 417:
'After a general discussion it was decided that an approach be made to Mr. Pasmore'"—
the gentleman who found so many people unanimously in favour of the Bill, although 19 later petitioned against it—
'Sir Oliver Crosthwaite-Eyre and Sir Dawson Bates to inform them that it was the wish of the commoners to withdraw from the scheme to fence the commons within New Forest boundaries.… Members of the Committee expressed willingness to make down payments towards the cost of the fencing and gridding but not to pay marking fees and be subject to the Verderers' by-laws.'
In Question 418, Sir Dawson Bates, the agent for the National Trust was asked:
And, upon that view being expressed to you, Sir Dawson, you took the line that the Management Committee was now no longer supporting the National Trust in their support of this Bill and, therefore, should be given the sack?—That is broadly speaking the position, yes.
There are still traces of the old squirearchy in this England, and some of it in the New Forest. One might understand the verderers behaving in this tyrannical way in their private court to people coming before them, but when


the National Trust, whose aim is to protect commons, acts in this way, one can only recall John Hampden and take the side of these commoners against a petty little Charles I. If I had any doubts as to which side I would take in this issue, they were resolved when I read those two paragraphs.
I said earlier that the question of these commoners' rights, when they come inside, will have to be vetted by the Verdeters Court. Counsel on their behalf very rightly said, before the Select Committee:
As I say, your Lordships, in the shoes of the commoners, could well think that they are not likely to get much shrift from the National Trust when the Bill gives that body the duty of looking after the affairs of the commoners in the way I have indicated.
The same speaker also said, and he is a lawyer, and lawyers are temperate in their language:
… I have never come across an attitude adopted by a responsible body equal to that of the National Trust in this matter.
That is a Trust that sacked members of the Management Committee merely because they were carrying out the real purposes of the National Trust.
I know that after the Bill's passage through the Select Committee in another place its promoter put in a concession that commoners will not be charged a marking fee in the first five years, half price in the next five years, and the full charge thereafter. But when John Hampden refused to pay ship money he had a demand to pay only £1. Of that, Burke has said:
Would twenty shillings have ruined Mr. Hampden's fortune? No! but the payment of half twenty shillings, on the principle it was demanded, would have made him a slave.
Right through the story, these commoners have refused to compromise, and I honour them for sticking to their principles.

It being Ten o'clock, the debate stood adjourned.

Ordered,
That the Proceedings on or relating to the New Forest Bill [Lords] may be entered upon and proceeded with at this day's Sitting at any hour, though opposed.—[Mr. Hughes-Young.]

Dr. King: I read very carefully the whole of the Select Committee's Report and I pay tribute to Mr. Hugh Forbes, who argued the case of the commoners

far more lucidly and eloquently than I can do. There are, of course, good reasons for doing what the Bill does to a handful of British citizens. Most wrongs are committed, at first at any rate, for good reasons. But despite the plausible reasons, and some of them even suspect reasons, the commoners whose case I am pleading are being wronged if they are made to pay what since ancient times has been free in order to save the New Forest commoners about £250 for fencing.
The Chairman of the Plaitford Parish Council, voicing the views of this little unit of democracy, writes to me:
I am one of those on the local National Trust Committee who were sacked because we dared to represent the only people who looked like bring hurt if the Bill became law as it stood. You may well ask where I stand in this. I have nothing to gain whatever happens, but after all I am Parish Council Chairman and as far as I can I feel it my duty to represent my parishioners, majority and minority. I am interested in this district, its customs and history due to the fact that my family came here with the Normans and lived around the district ever since. Therefore, I hate to see old landmarks, buildings, etc., destroyed and also the destruction of less tangible things. After all, for six years did we not fight halfway round the world to preserve this sort of thing?
It is because I believe in "this sort of thing" that I urge those who will examine the Bill in Committee to see that the commoners north of the New Forest are not deprived of their rights by the Bill. It can be done without damaging a single feature of the purpose of this otherwise worthy Bill. I hope that what I have said may persuade the House and the Committee which it appoints to give due justice to a handful of commoners who will be wronged if the Bill goes through in its present form.

10.3 p.m.

The Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mr. James Scott-Hopkins): I intervene at this stage to express the Government's attitude towards the Bill. I should also like to join with hon. Members in saying how sorry I am that my hon. and gallant Friend the Member for the New Forest (Sir O. Crosthwaite-Eyre) is not here, and that he has been prevented from moving the Second Reading of a Bill to which he devoted so much time and energy, as was kindly


said by the hon. Member for Southampton, Itchen (Dr. King).
I also take the opportunity of congratulating my hon. Friend the Member for Bournemouth, West (Sir J. Eden) on his skill as an understudy, a task which I gather he undertook at extremely short notice, and on the exhaustive way in which he went through the Bill and presented it to the House in great detail.
An extremely important feature of the Bill, which was introduced in another place, is the inclusion of various adjacent commons within the revised perimeter of the New Forest. As the House will know, my right hon. Friend has a quasi-judicial function in relation to proposals affecting common land. We therefore had to study this point, and as the Bill went through another place a number of commoners, as the hon. Member for Itchen has said, laid a petition. The hon. Member quoted several large passages from the evidence given as a result of that petition. The question was carefully considered by a Select Committee in another place, as I am sure the House agrees, and as a result the promoters of the Bill accepted Amendments and offered concessions. I say this in the plural and not in the singular, as the hon. Member for Itchen was inclined to put it.
I should, therefore, like to say that the Government are in sympathy with the general objectives of the Bill. Indeed, I am sure that the whole House will join in applauding the primary purpose of the Bill which is to make the roads of the New Forest safer for man and beast. I do not think that there has been a single dissident voice on either side of the House on this point. Although the Bill does not give the Forestry Commission a material increase in its powers, in so far as it does affect the Commission the provisions of the Bill are all workable and would help the Commission in its administration of the Forest.
As I have said, the Amendments and concessions that have been made appear to safeguard the commoners' interests. The Government will consider carefully the comments that have already been made in this debate and any comments which may be made later. We may,

indeed, have views on points of detail which could be considered at a later stage, but I suggest that it would be reasonable to give the Bill a Second Reading so that it can go forward for detailed scrutiny by a Select Committee under the procedure of the House of Commons, this procedure being specially designed for a Bill of this sort.
I hope that such a course will be acceptable to the House.

10.7 p.m.

Mr. Emlyn Hooson: When Lord Crathorne was introducing this Bill in another place on the occasion of its Second Reading, he suggested that his fellow peers would be curious to know why a North Countryman should be introducing such a Bill. Likewise I imagine hon. Members in this House will be curious to know why a Welshman should intervene in a debate concerning the New Forest. Suffice it to say, as my hon. Friend the Member for Southampton, Itchen (Dr. King) has adverted to it, that there are considerable minority interests concerned, and I have been approached by people who object in principle to this Bill just as Lord Crathorne had been approached by the promoters of the Bill in another place.
I have not the advantage of any detailed knowledge of the New Forest. I know it, but I do not know it well, and I do not pretend to be able to speak about it with the same authority as my hon. Friend the Member for Itchen, or, indeed, the hon. Member for Bournemouth, West (Sir J. Eden).
I am going to concentrate very shortly on the objections in principle to this Bill. First, I think I am right in saying that there is a centuries-old practice which has grown up with regard to the affairs of the New Forest, that before any changes take place in its administration or in the status of those who have rights there, they have always been preceded by a committee or a commission of inquiry held in public.
I think I am right in saying that this is the first time that it has been sought to deal with the affairs of the New Forest by means of a hybrid Bill. Previously Crown proceedings have always been brought following upon a public


inquiry. I know that the Liberal Association in the New Forest wrote to the Minister of Agriculture, Fisheries and Food in June last year and sent a memorandum with a petition asking for a public inquiry to be held on the lines of the famous Baker Committee inquiry in 1947. This was before any Private Bill had been introduced. The Minister of Agriculture turned down this request. I should like to know why. There are very important reasons why there should have been a public inquiry, why interests, both large and small, and individuals should have been heard by a detached tribunal of inquiry, and why a report should have been before this House and another place when a Bill such as this was to be considered.
We should not forget that the Baker Committee in 1947 said:
There are three interests which from time to time clash—the Forestry Commission, the commoners and the general public. The only hope for the future lies in the formation of a new body which shall be representative of all interests. To be efficient, it must not only have an altered constitution but enlarged powers. We recommend the constituting of a new Court of Verders, with a Chief Verderer, four elected representatives of the commoners, and six others: two representatives of the Forestry Commission, two rural district council representatives and one each representing the Ministry of Agriculture and the Council for the Preservation of Rural England.
That was what the Baker Committee recommended but, in fact, when the Bill was introduced in 1949, although the Court was reconstituted, it was reconstituted in such a way that the commoners virtually still had a majority, together with the appointed verderer, and the local authorities had no representation.
The second reason why I oppose the principle of the Bill is this. In fact, the Court of Verderers is an archaic body which has been reformed to a certain extent but which, nevertheless, represents only some interests. As the hon. Member for Itchen pointed out, although the Bill is not mandatory with regard to public expenditure, it is permissive. It permits quite considerable expenditure, and the public are asked to pay for it, either as ratepayers or as taxpayers.
What representation have members of the public in the Court of Verderers? There is really no representation at all.

I much enjoyed the courteous and lucid speech of the hon. Member for Bournemouth, West in introducing the Bill, but I should like him to deal with this point. What representation does he think the public ought to have? Is this expenditure to be allowed without representatives of the public authorities having a say in it or having control over the development of the New Forest? Without doubt, the Bill gives the Court of Verderers considerably enlarged powers. For example, it allows the face of the New Forest to be changed. The unique feature of the Forest, surely, is the open access from roads and so on. It is a major development that fencing is to be allowed which will change this unique "open front" character of the New Forest.
I am told that in the hand-out issued at the initial Press conference, there was a reference to
the further financial burden upon the Crown which alone makes this Bill possible".
The "further financial burden upon the Crown" means, virtually, that the ratepayers and the taxpayers will] be asked to pay.
During the Second Reading debate in another place, Lord Dowding, after giving various calculations with reference to the total cost of fencing, said:
So the job of protecting animals by fencing the roads would ultimately cost something in the neighbourhood of £400,000 of public money."—[OFFICIAL REPORT, House of Lords, 30th January, 1964; Vol. 254, c. 1329.]
This includes not only the money which is authorised or permitted to be spent under this Bill but also the money which has previously been spent and, of course, there is contemplated the fencing of B highways as well as the trunk roads. Nevertheless, this is a very large sum of public money.
The case which in principle I put against the Bill is this. When a large sum of public money like this is permitted to be spent by virtue of the Bill, when there are living in the area, not only commoners, but non-commoners who are ratepayers or taxpayers, when we consider the enormous amenity which the New Forest is to the public in the country as a whole and that one of its great attractions and charms is that it is an open forest where one can stop at the


roadside and simply walk into it, a considerable case can be advanced for reservations as opposed to fencing of this kind and for saying that there should have been a public inquiry and a full report made to members of this House and of the other place so that they could consider it. A vital principle is involved. When taxpayers and ratepayers are asked to finance large public expenditure, there should be a very considerable element of public control over it.
There is an overwhelming case for complete reconstruction of the composition of the Court of Verderers. I should like to know—and I am sorry that the Parliamentary Secretary spoke before I did—whether the Ministry of Agriculture thinks that the Court, as at present constituted, represents the public interest as well as the interest of the commoners. I should also like to know why the Ministry of Agriculture turned down the application for a public inquiry.

10.16 p.m.

Sir Barnett Janner: I add my congratulations to the hon. Member for Bournemouth, West (Sir J. Eden) for the clear and concise manner in which he introduced the Bill and to the hon. and gallant Member for New Forest (Sir O. Crosthwaite-Eyre), who, I hope, will shortly be with us again, for the way in which he dealt with the Bill in its preliminary stages.
My hon. Friends and the hon. and learned Member for Montgomery (Mr. Hooson) have touched on points of detail which will have to be considered. I welcome the Bill because of what is said in the Explanatory Memorandum, which states:
One of the main purposes of the Bill is to reduce the number of accidents in and adjacent to the New Forest involving animals and motor vehicles by providing such fences and cattle-grids as may be necessary to contain animals within the New Forest.
Whatever argument may be raised about cost, the important question is whether lives, either of animals or human beings, will be saved. A proper approach to the number of injuries and deaths which are caused by straying animals is long overdue, and whatever measure is introduced to this end is to be welcomed.
One fact is certain: that the Government, for the first time as far as I can see, have been prepared to back a Bill which deals with the damage being done by straying animals. That does not mean that I am at all satisfied with what they have done. On the contrary, I hope that they realise that in permitting themselves to sponsor a Private Bill for this purpose, they have at long last done something towards remedying a widespread serious position. Straying animals are a menace to life and limb. A Government who allow the position, not only in the area with which the Bill is concerned, but throughout the country as a whole, to remain in the present most unsatisfactory state are doing a great disservice to the community.
Perhaps I should declare my interest. It is a public one. Some time ago, I presented a Private Member's Bill, which I hope that the Government, having seen the error of their ways up to this stage, will now sponsor. That Bill deals with the matter on a wider scale. I presented a petition to the appropriate Minister. It was not a formal petition which could be presented to the House, because, unhappily, it did not possess the necessary exact technical features. It contained 700 names, however, many of them from my constituency, concerning the position of a landowner who was immune from proceedings for loss or injury caused by horses or animals straying on the highway and calling upon the Minister to introduce legislation to impose liability for fencing the land.
I wrote to the Attorney-General asking what he proposed to do. His reply concerning straying animals was as follows:
Thank you for your letter of 3rd March enclosing petitions in support of your Highways (Straying Animals) Bill"——

Mr. Deputy-Speaker (Sir Robert Grimston): Order. If the hon. Member is referring to a petition in connection with another Bill, it is out of order for him to refer to it except in passing on the Second Reading of the present Bill.

Sir B. Janner: I do not propose, Mr. Deputy-Speaker, to go into detail about it. I propose to show that my support of the Bill today is based on the fact


that it is the thin end of the wedge in something which is of extreme importance. I quote my illustration because, up to this point, the Government have not taken the view that they can sponsor a Measure to deal with injuries which are caused in the manner referred to in the Explanatory Memorandum of the Bill. Today's Bill touches the same point, although the other Bill relates to a larger area, but I take the larger area to point the position concerning the New Forest Bill.

Mr. Anthony Kershaw: If the hon. Member is making the point that all fences should be made so that no beasts get out on to the road, and that all commons should be fenced, the rural communities will realise that the Labour Party is entirely against the interests of all people living in the rural areas.

Sir B. Janner: I am not suggesting that all places should be enclosed.

Mr. Kershaw: Battersea Park is all right.

Sir B. Janner: We are talking not about Battersea Park, but about the New Forest. I assume that the hon. Member for Stroud (Mr. Kershaw) is in favour of the Bill. He has not expressed himself against it. I did not understand his intervention. If he is against the Bill, let him say so. This is precisely why it is essential, Mr. Deputy-Speaker, for me to explain the position to an hon. Member who does not understand it.

Mr. Kershaw: I understand it very well.

Sir B. Janner: The Bill is desirable because it relates to the important matter of preventing serious injury to life and limb.

Mr. Kershaw: I fully understand the hon. Gentleman, who makes himself very clear. In his eyes, this is the thin end of the wedge to make all farmers responsible for whatever their stock may do if it gets out on the road, or off common land. This is a very serious and far-reaching matter on which the hon. Gentleman should expand a little further.

Sir B. Janner: I am much obliged, and if you will allow me to expand the matter, Mr. Deputy-Speaker——

Mr. Deputy-Speaker: The hon. Member can make the point, as he has made it, that he approves the Bill because it may lead to something further, but that is about as far as he can go on a Bill which deals only with the New Forest.

Sir B. Janner: I appreciate that, but I cannot make my points sufficiently clear unless I deal with cognate matters, because they reflect on the New Forest situation. The hon. Member's intervention indicates quite clearly how important it is that one should bring to bear upon it the arguments relating to this aspect of the subject.
We are dealing with an attempt to reduce the number of accidents, but we cannot discuss that in relation to the New Forest in a vacuum. We must consider why the New Forest should be distinguished, if it is to be distinguished, from other parts of the country in this respect. I asked that the matter should be dealt with on a national basis, but I was told that the subject was highly controversial and tha it seemed unlikely that agreement could he reached on a solution acceptable to all the interests concerned.
What is most important in the Bill is the idea of preventing the straying of animals on to the roads where they cause serious loss of life. The New Forest Society for the Prevention of Straying Animals supplied me with the police figures that 69 motorists were injured, 23 seriously, in such accidents last year, and tha they were unable to claim damages against owners of the animals because of the present state of the law. Also 506 animals were killed or injured during that period. The injuries to animals are dreadful, particularly as many motorists, not daring to be faced with having to redress the owner of the animal, drive on, leaving the injured, perhaps dying, creature in agony on the road. In this age, that is an indictment of our community's neglect to take the necessary steps to prevent injury to man and beast. We are all very deeply concerned about this.
I therefore repeat that because an attempt is being made here to deal with this position, those of us who are concerned with the question of seeing that this type of provision prevails throughout the country are hopeful that this will be the commencement of something which will extend very much further.

Mr. Hooson: Is the hon. Member concerned to see that all the land in the country should be fenced, and that owners of straying animals should be held legally liable for any damage done by those animals?

Sir B. Janner: Am I allowed to answer that question, Mr. Deputy-Speaker?

Mr. Deputy-Speaker: The hon. Member can answer it in relation to the Bill which is now before us.

Sir B. Janner: From what you have said, Mr. Deputy-Speaker, it is clear that it would not be in order to give the answer that I would like to give. I merely say, in passing, that I think it

is important that this should be done in his area, and the hon. and learned Member can draw his own conclusions as to what my view is in respect of other parts of the country.
There are features of the Bill which will have to be very carefully scanned and dealt with in the course of further stages. The points made by my hon. Friend are extremely important from the point of view of local residents. Everyone is hopeful that the ultimate result, when the Bill becomes an Act, will be a saving of life and limb in the area. In those circumstances, I give my support to the Measure, subject to the Amendments indicated by my hon. Friend.

10.32 p.m.

Sir J. Eden: With the leave of the House, Mr. Deputy-Speaker, I will briefly reply to some of the points that have been raised. I am grateful to hon. Members who have taken part in this short debate, especially to the hon. Member for Southampton, Itchen (Dr. King) and the hon. and learned Member for Montgomery (Mr. Hooson). Hon. Members have made a number of points. I cannot answer them all, as I am sure they will appreciate, but these matters will be subject to discussion at later stages of the Bill.
I can tell the hon. Member for Itchen that the answer to his point about the reference to the existence in the printed Bill of Clause 17(3), which states that
Nothing in this Act shall impose any charge on the people or on public funds
is to be found at the top of page 1 of the Bill, above the Title, where it is said:
The Words marked by a black line in the margin were inserted by the Lords to avoid questions of Privilege.
The words in Clause 17 were inserted in order to ensure that their Lordships were in order in discussing the Bill. At a later stage subsection (3) will probably be struck out.

Dr. King: That makes it worse. This is a real legal fiction. It is not in order for the other place to talk of finance without a great deal of euphemism and circumlocution. The other place can do nothing about money. We took that power from them a long time ago. I suggest that the black line is by the side of something that is not true.

Sir J. Eden: I take the hon. Gentleman's point, but I am afraid that neither he nor I can alter the procedure of Parliament and that the explanation for the existence of that subsection is, I believe, as I have given it.
The two major points of substance raised in the speech of the hon. Gentleman and in that of the hon. and learned Member for Montgomery concerned the representation of commoners and the taking away of their rights. There was a third point which I hope to touch

upon, and that is the question of the payment of the costs of the operations as set out in the Clauses of the Bill.
I can say that the promoters are prepared to give the most favourable possible consideration to requests for representation. In fact, they have already indicated this fact and I am told that discussions are under way as to how this can best be achieved. There is no desire on the part of the promoters to exclude from representation, not as members of the Verderers' Court but in some form of association with the Verderers' Court, those interests now contained in other areas.
How exactly this representation is to be achieved is a matter for discussion and negotiation, which are taking place at the present time, but there is the intention on the part of the promoters to try and meet this point.

Dr. King: The hon. Gentleman must needs say more than he has said so far. If they take in the common lying outside, not even the present Verderers' Court could take away their right somehow to be represented on the court.

Sir J. Eden: That is quite right. That is a later point which the hon. Gentleman made, and which, I suspect, he has now contradicted.

Mr. Hooson: Can the hon. Gentleman give the grounds on which the promoters of the Bill would object to the Verderers' Court being extended to include representatives of the public?

Sir J. Eden: I am coming on to the question of the make-up of the Verderers' Court, but the first point that I wanted to get clear was as to the actual representation of the interests now becoming added to the New Forest. If there is no way in which those interests shall be represented, the promoters are prepared to discuss with them how this should be done.
Perhaps this would be a convenient point at which to come on to the question of the 'Verderers' Court. The makeup of the court, as was indicated, was set out in Section 1 of the 1949 Act. This provided for 10 verderers—the official verderer, five elected verderers and four appointed verderers. For reasons of brevity I did not earlier go


into details, but in view of the discussion I think that it might be worth while to point out that the four appointed verderers are appointed by the Minister of Agriculture, the Forestry Commissioners and the local planning authority and that the fourth person is one designated by the Minister as being specially concerned with the preservation of the natural beauties of the countryside.
As to the five elected verderers—and it was on this point that the hon. Gentlemen were primarily exercised—it is open to anybody to stand for election to the Verderers' Court provided he is a commoner with common rights. I think that this is fair enough. It is not tied, as it was, I believe, in an earlier part of our history, to a minimum acreage of land. It can be the small landowner as well as the big landowner, and it is merely a matter of standing for election and securing election in a very democratic way in order to enable a person to be elected as one of the members of the Verderers' Court.
The hon. Member for Itchen referred to the "taking away" of rights. I hesitated a moment on the use of the words" taking away" but I accept the fact that what is being taken away is the freedom to pasture animals on the common without having to pay anything for that right, and under this Bill the right to pasture animals will carry with it a marking fee.
It is not the case, as the hon. Member claimed, that these people will have to go to the Verderers' Court to see if their rights are really tenable. I understand that it is not so. This is the point of amending Clause 1 (4). That subsection now reads:
…the lands which are designated…as lands to which are attached rights of common of pasture or a privilege of pasture over any part of the added areas shall be treated as lands to which are attached rights of common of pasture within the perambulation of the New Forest as altered by this Act.
The addition of the words "privilege of pasture" means, as far as the verderers are concerned, that those who have rights, or deem themselves to have rights, will be regarded as having rights when the new perambulation comes into force and when they are included within it.
Perhaps what the hon. Member had in mind was Clause 2, which concerns the powers of the Forestry Commission. This I described as the machinery Clause, giving power to the Commission to bring up to date what is known locally as the "atlas". In the atlas are marked those lands which carry with them rights of common of pasture.
It is in the negotiations or discussions as to whether or not lands shall be included within the atlas as so marked as having these rights that perhaps the hon. Member's point will arise. It is not vis-à-vis the verderers, however, that his correspondents should be directed but vis-à-vis the Forestry Commission in bringing the atlas up to date.
In Clause 2, provision is made for this, because the Clause allows for the appropriate consultation and also confers rights to object to the additional plans when they have been prepared and, as I have pointed out, these rights are exactly the same as those rights conferred by the 1949 Act. I think that, thereby, the points raised by the hon. Member are taken care of.
Then the hon. Member went on to talk about the National Trust. He quoted certain questions which were asked during the course of the Select Committee proceedings in another place. But I think it fair to point out—and I have no brief to defend the National Trust one way or another—the answers to Questions 420 and 423, in which the witness said that the objective of the Management Committee was to manage the common in the interests of the National Trust.
Probably, if the National Trust considered that the Committee was not managing the common in the interest of the Trust, it would be perfectly all right for the Trust to appoint another Committee. It is the owner of the land in question. It is in the ownership of the land that the common rights exist and it is the Trust's responsibility to determine what is in the best interests of the administration of the land for which it is responsible and of which it is the owner.

Dr. King: I, too, do not hold a brief for anyone. One of the duties of the National Trust is to protect the common right of the commons themselves, as well as the commoners. This is where


the National Trust failed. The members of the Management Committee were doing the job of the National Trust. It was the National Trust which was betraying its trust in sacking those members.

Sir J. Eden: I slightly disagree. I do not mean to labour this point, but it is not the responsibility of the National Trust to protect the interests of the commoner. The National Trust is responsible to the country for the administration of the commons and, in the context of the Bill, the National Trust was convinced—and this is how I have interpreted the evidence before the Select Committee of another place—that the interests of the common would be best served by the inclusion of that common within the perambulation of the New Forest.
The hon. and learned Member for Montgomery expressed concern because, he said, there had been no inquiry before the Bill. It is only fairly recently that an exhaustive inquiry, carried out by the Baker Committee, was made in 1946 and 1947. The 1949 Act gave legislative provision to many of the recommendations made as a result of that inquiry. This Bill seeks to give legislative approval to further recommendations of that same inquiry. It is reasonable to say that the 1946–47 inquiry is pertinent indeed.
The hon. and learned Member for Montgomery then commented on the fact that this was a hybrid Bill, but so were the Acts of 1877 and 1879, although I acknowledge that the Act of 1949 was a public Measure. I believe that in this case this procedure is right and that the Bill is, in a sense, public more than private. That has been recognised because the Government, in their generosity, have enabled us to have time to debate it. We have also had the Second Reading debate on the Floor of the House tonight.
I was asked who pays. I cannot give an answer to that, but I can express the hope that my hon. Friend the Joint Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food has heard what has been said. Although I appreciate that my hon. Friend has been careful not to commit himself in this regard, I hope that some provision may be made out of funds available to his Department to assist the financing

of these works where they are designed to improve the Forest and safeguard the interests of those who live in and pass through it.
Among the number of important points raised by the hon. Member for lichen, he stressed what I recognise is the perfectly justifiable view of those who are now outside the perambulation of the New Forest and who have common rights. They have indicated that they do not mind coming into the New Forest, but they do not want to be subject to the Verderers' Court or byelaws.

Dr. King: They do not want to come in.

Sir J. Eden: The hon. Gentleman was fair to emphasise that he was speaking for a minority. I think that he was possibly speaking for a minority within a minority. It is certainly a very small section of the people concerned with common rights who are upset by the inclusion within the perambulation of the New Forest.
The chief concern of those people is over the extension of the byelaws of the Verderers' Court. The chief difficulty over the extension of these byelaws, and one of the main reasons why these areas should be included within the perambulation of the Forest, is to maintain the highest possible standard of health and breeding among the animals which roam the area.
The right of vicinage has been mentioned, and it is a fact that the Forest commoners have the right to depasture their animals on the adjacent common. If this is not regulated, and if the animals on the adjacent commons are not controlled in any way, then, as was shown in the evidence of a veterinary witness before the Select Committee, the danger of the spread of disease, particularly contagious abortion, is very real. For those reasons, it is important that the animals on the pasture on the adjacent lands, associated so closely as they are, and will be, with the Forest, should be subject to fairly stringent standards in order to protect the general health of all the animals concerned.
The hon. Member for Leicester, North-West (Sir B. Janner), in what at any other time might have been a most engaging diversion in one or two respects, while supporting the general principles of the Bill referred to the dangers


caused by straying animals, and that is a matter we have very much in mind. As all hon. Members know, and particularly those who know the Forest intimately—the Forest would not be the same without the animals—in fact, it could not exist without them. There are some people who regard all animals as a menace and a nuisance, but without the animals the Forest would quickly become a wilderness, and be of no value, either aesthetically or otherwise, to any of us.

Sir B. Janner: The hon. Member will realise that I had no intention of suggesting that what he has said is incorrect, but I wanted to stress that the precautions to which I referred were highly important and necessary.

Sir J. Eden: I will not seek further to develop a point that the hon. Gentleman has already developed.
I apologise to the House for the inadequacy of my reply to some of the points made, but I assure hon. Members that if these matters are to be pursued later, the promoters of the Bill will give every consideration to them, and seek to help——

Mr. Hooson: Can the hon. Gentleman tell us whether the promoters themselves have any objection to the local authority having representation on the Verderers' Court? As taxpayers' money is involved, and as the Baker Committee recommended that two representatives of the rural district council should sit on that court, have the promoters any objection to it?

Sir J. Eden: I cannot say what are the limitations on the number of verderers, whether one should seek to amend Section 1 of the 1949 Act, which laid down that there shall be 10 verderers, or whether the Section can be altered so as to change the composition of the verderers, but I should have thought that the hon. and learned Gentleman had some satisfaction from the fact that the appointed verderers, of whom there are four, included one appointed by the local planning authority. That ensures that, through them, the local planning authority is kept closely informed. In addition, the Minister of Agriculture himself appoints

two of the appointed verderers, so that, in that way also, contact is maintained with official circles. However, that goes rather outside the actual provisions of the Bill—there is no Clause that seeks to amend Section 1 of the 1949 Act.

Question put and agreed to.

Bill accordingly read a Second time.

Ordered,
That the Bill be committed to a Select Committee of Eight Members, Four to be nominated by the House and Four by the Committee of Selection:

Ordered,
That there shall stand referred to the Select Committee—

(a) any Petition against the Bill presented by being deposited in the Private Bill Office at any time not later than the fourteenth day after this day, and
(b) any Petition which has been presented by being deposited in the Private Bill Office and in which the Petitioners complain of any amendment as proposed in the filled-up Bill or of any matter which has arisen during the progress of the Bill before the said Committee.

being a Petition in which the Petitioners pray to be heard by themselves, their Counsel or Agents:

Ordered,
That if no such Petition as is mentioned in sub-paragraph (a) above is presented, or if all such Petitions are withdrawn before the meeting of the Committee the Order for the committal of the Bill to a Select Committee shall be discharged and the Bill shall be committed to a Committee of the whole House:

Ordered,
That any Petitioner whose Petition stands referred to the Select Committee shall, subject to the Rules and Orders of the House and to the Prayer of his Petition, be entitled to be heard by himself, his Counsel or Agents upon his Petition provided that it is prepared and signed in conformity with the Rules and Orders of the House, and the Member in charge of the Bill shall be entitled to be heard by his Counsel or Agents in favour of the Bill against that Petition:

Ordered,
That the Committee have power to report from day to day the Minutes of the Evidence taken before them:

Ordered,
That Three be the Quorum of the Committee.—[Sir John Eden.]

ADJOURNMENT

Resolved, That this House do now adjourn.—[Mr. Pym.]

Adjourned accordingly at five minutes to Eleven o'clock.